Exhibit 99.1

Denison Mines Corp.

2022 Annual Information Form 

March 27, 2023

About this Annual Information Form

This annual information form (“AIF”) is dated March 27, 2023. Unless stated otherwise, all of the information in this AIF is stated as at December 31, 2022.

This AIF has been prepared in accordance with Canadian securities laws and contains information regarding Denison’s history, business, mineral reserves and resources, the regulatory environment in which Denison does business, the risks that Denison faces and other important information for Shareholders.

Financial Information

Unless otherwise specified, all dollar amounts referred to in this AIF are stated in Canadian dollars (“CAD”). References to “US$” or “USD” mean United States dollars.

Financial information is generally derived from consolidated financial statements that have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Caution about Forward-Looking Information

Certain information contained in this AIF and the documents incorporated by reference concerning the business, operations and financial performance and condition of Denison constitutes forward-looking information within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation.

Generally, the use of words and phrases like “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, or the negatives and/or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” “be taken”, “occur”, “be achieved” or “has the potential to” and similar expressions are intended to identify forward-looking information.

Forward-looking information involves known and unknown risks, uncertainties, material assumptions and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Denison believes that the expectations and assumptions reflected in this forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. This information speaks only as of the date of this AIF, and Denison will not necessarily update this information, unless required to do so by securities laws.

Examples of Forward-Looking Information

This AIF contains forward-looking information in a number of places, including statements pertaining to Denison’s:

Statements relating to “mineral resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral resources described can be profitably produced in the future.

Material Risks

Denison's actual results could differ materially from those anticipated. Management has identified the following risk factors which could have a material impact on the Company or the trading price of its common shares (“Shares”): 

The risk factors listed above are discussed in more detail later in this AIF (see “Risk Factors”). The risk factors discussed in this AIF are not, and should not be construed as being, exhaustive.

Material assumptions

The forward-looking statements in this AIF and the documents incorporated by reference are based on material assumptions, including the following, which may prove to be incorrect:

A Note for US Investors Regarding Estimates of Measured, Indicated and Inferred Mineral Resources and Proven and Probable Mineral Reserves

This AIF uses the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource”, which are Canadian mining terms as defined in and required to be disclosed in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), which references the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards on Mineral Resources and Mineral Reserves (“CIM Standards”), adopted by the CIM Council, as amended. Previously, the CIM Standards differed significantly from standards in the United States. The U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”). These amendments became effective February 25, 2019 (the “SEC Modernization Rules”) with compliance required for the first fiscal year beginning on or after January 1, 2021. The SEC Modernization Rules replace the historical disclosure requirements for mining registrants that were included in Industry Guide 7 under the United States Security Act of 1933, as amended. As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”. In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable mineral reserves” to be “substantially similar” to the corresponding definitions under the CIM Standards, as required by NI 43-101.

United States investors are cautioned that while the above terms are “substantially similar” to the corresponding CIM Definition Standards, there are differences in the definitions under the SEC Modernization Rules and the CIM Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had the Company prepared the reserve or resource estimates under the standards adopted under the SEC Modernization Rules.

United States investors are also cautioned that while the SEC now recognizes “indicated mineral resources” and “inferred mineral resources”, investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any “indicated mineral resources” or “inferred mineral resources” that the Company reports are or will be economically or legally mineable. Further, “inferred mineral resources” have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the “inferred mineral resources” exist. In accordance with Canadian securities laws, estimates of “inferred mineral resources” cannot form the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43-101.

Accordingly, information contained in this AIF and the documents incorporated by reference herein containing descriptions of the Company’s mineral deposits 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.

About Denison

Denison Mines Corp. is primarily engaged in uranium exploration and development. The registered and head office of Denison is located at 1100 – 40 University Avenue, Toronto, Ontario, M5J 1T1, Canada. Denison’s website address is www.denisonmines.com.

The Shares are listed on the Toronto Stock Exchange (“TSX”) under the symbol “DML” and on the NYSE American under the symbol “DNN.”

Computershare Investor Services Inc. acts as the registrar and transfer agent for the Shares. The address for Computershare Investor Services Inc. is 100 University Avenue, 8th Floor, Toronto, ON, M5J 2Y1, Canada, and the telephone number is 1-800-564-6253.

In this AIF, Denison or the Company means Denison Mines Corp., Shareholders means holders of Denison’s common shares and Shares means Denison’s common shares.

Denison is a reporting issuer in all of the Canadian provinces and territories. The Shares are also registered under the U.S. Exchange Act, and Denison files periodic reports with the United States Securities and Exchange Commission.

Acknowledgement

Denison respectfully acknowledges that our business operates in Canada on lands that are in the traditional territory of Indigenous peoples. Our activities encompass the entire mining life cycle, from early-stage exploration to advanced project evaluation, construction, operation, closure and restoration – with the potential for activities to span many decades. As such, Denison is committed to collaborating with Indigenous peoples and communities to build long-term, respectful, trusting, and mutually beneficial relationships and aspires to avoid any adverse impacts of Denison’s activities and operations.

Denison has adopted an Indigenous Peoples Policy, 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. A copy of the Indigenous Peoples Policy is available on Denison’s website, in Déne, Cree, English and French languages.

Denison’s Head Office is located in the traditional territory of many nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples, and is now home to many diverse First Nations, Inuit and Métis peoples. We also acknowledge that Toronto is covered by Treaty 13 with the Mississaugas of the Credit.

Denison’s exploration and evaluation operations in Saskatchewan, including its office in Saskatoon and various project interests in northern Saskatchewan, are located in regions covered by Treaty 6, Treaty 8 and Treaty 10, which encompass the traditional lands of the Cree, Dakota, Déne, Lakota, Nakota, Saulteaux, within the homeland of the Métis and within Nuhenéné.

Denison’s flagship Wheeler River Uranium Project, in particular, is located in northern Saskatchewan within the boundaries of Treaty 10, in the traditional territory of English River First Nation, in the homeland of the Métis and within Nuhenéné.

Denison’s Closed Mines operations in the Elliot Lake region of northern Ontario are located within the boundaries of the Robinson Huron Treaty of 1850, signatories to which include the Serpent River First Nation.

Denison’s Team

At the end of 2022, Denison had a total of 76 active employees, all of whom were employed in Canada. None of the Company’s employees are unionized.

Denison’s Structure

Denison conducts its business through a number of subsidiaries and joint arrangements. The following is a diagram depicting the corporate structure of Denison, its active subsidiaries and corporate and partnership joint arrangements as at December 31, 2022, including the name, jurisdiction of incorporation and proportion of ownership interest in each.

JCU (Canada) Exploration Company, Ltd. (“JCU”) is owned by Denison (50%) and UEX Corporation (“UEX”, 50%). Denison and UEX, a wholly-owned subsidiary of Uranium Energy Corp., are parties to a shareholders agreement governing the management of JCU and UEX was appointed manager for JCU pursuant to the terms of such shareholders agreement.

The Waterbury Lake Uranium Limited Partnership (“WLULP”) is held by Denison (67.40%) and Korea Waterbury Uranium Limited Partnership (“KWULP”) (32.58%) as limited partners and Waterbury Lake Uranium Corporation (“WLUC”) (0.02%), as general partner, with Denison’s aggregate interest in the partnership being 67.41%.

Denison Overview

Uranium Exploration and Development

Denison’s uranium property interests are held directly by the Company or indirectly through Denison Mines Inc. (“DMI”), Denison Waterbury Corp. and Denison AB Holdings Corp.

Services

Denison’s Closed Mines group manages the Company’s closed mine sites in the Elliot Lake region and provides third-party post-closure mine care and maintenance and related services.

Toll Milling

Denison is a party to a toll-milling arrangement through its 22.5% interest in the MLJV, whereby ore is processed for the Cigar Lake Joint Venture (“CLJV”) at the McClean Lake processing facility (the “Cigar Toll Milling”). In February 2017, Denison completed a transaction (the “Ecora Transaction”) with Ecora Resources PLC (“Ecora”), formerly known as Anglo Pacific Group PLC, and its wholly owned subsidiary Centaurus Royalties Ltd. to raise gross proceeds to Denison of $43,500,000. The Ecora Transaction monetized Denison’s future share of the Cigar Toll Milling, providing Denison with the financial flexibility to advance its interests in the Athabasca Basin, including the Wheeler River project.

While the Ecora Transaction monetized certain future toll milling receipts from the Cigar Toll Milling, Denison retains a 22.50% strategic ownership stake in the MLJV and McClean Lake processing facility. See “Denison’s Operations – Cigar Lake Toll Milling – Ecora Transaction”.

The Formation of Denison Mines Corp.

Denison was formed by articles of amalgamation as International Uranium Corporation (“IUC”) effective May 9, 1997 pursuant to the Business Corporations Act (Ontario) (the “OBCA”). On December 1, 2006, IUC combined its business and operations with DMI, by plan of arrangement under the OBCA (the “IUC Arrangement”). Pursuant to the IUC Arrangement, all of the issued and outstanding shares of DMI were acquired in exchange for IUC’s shares. Effective December 1, 2006, IUC’s articles were amended to change its name to “Denison Mines Corp.”

Denison subsequently completed a plan of arrangement with Energy Fuels Inc. in 2012 and filed articles of amalgamation on January 1, 2014, July 1, 2014 and July 3, 2014 in connection with Denison’s acquisitions of JNR Resources Inc. (“JNR”) and Fission Energy Corp. (“Fission”).

Developments Over the Last Three Years

2020…

Project Developments

In February, Denison reported that initial data from the core leach tests completed for Wheeler’s Phoenix deposit (“Phoenix”) includes elemental uranium concentrations, after test startup, in the range of 13.5 grams per litre (“g/L”) to 39.8 g/L, and an average of 29.8 g/L over a 20-day period of testing. This compared favourably to the previous metallurgical test work completed to assess the use of the in-situ recovery (“ISR”) mining method at Phoenix, which supported the use of an assumed uranium concentration of 10 g/L in the design for the ISR processing plant set forth in the Pre-Feasibility Study for the Wheeler River project completed in 2018 (“2018 PFS”).

Also in February, Denison reported that the results from the hydrogeological test work completed at Phoenix confirmed the ability to achieve bulk hydraulic conductivity values (a measure of permeability) consistent with the 2018 PFS. Extensive hydrogeological data sets were collected during the 2019 ISR field program for incorporation into a hydrogeological model being developed for Phoenix to be used for detailed planning of further ISR field tests intended to support the completion of a future Feasibility Study (“FS”).

In March, Denison announced the temporary suspension of activities related to the Environmental Assessment process for Wheeler River being undertaken in accordance with the requirements of the Canadian Environmental Assessment Act, 2012 and the Saskatchewan Environmental Assessment Act (the “EA”). The suspension, and other adjustments to the Company’s prior 2020 Outlook, were made amidst the significant social and economic disruption resulting from the COVID-19 pandemic and the Company's commitment to ensure employee safety, support public health efforts to limit transmission of COVID-19, and exercise prudent financial discipline.

In June, the Company announced a significant milestone in de-risking the technical risks identified in the 2018 PFS with the completion of independent hydrogeologic modeling for the Phoenix deposit at Wheeler River. The modelling was based on site-specific data collected from the 2019 ISR field program, which produced “proof of concept” for the application of the ISR mining method at Phoenix with respect to potential operational extraction and injection rates.

In July, Denison announced the resumption of ISR field testing activities at Phoenix, with the commencement of the 2020 ISR field program. The work was intended to further test the results of the hydrogeologic model developed for the deposit, and to support further field work expected to be required for the completion of a future FS.

Denison also announced that, in order to ensure the Company's operations comply with all applicable health and safety guidelines associated with the COVID-19 pandemic, all operating procedures at the Company's Wheeler River site were reviewed and adapted to incorporate physical distancing and enhanced hygiene protocols, as well as special travel protocols designed by Denison for northern Saskatchewan. Where applicable, the Company's protocols incorporated feedback received from potentially impacted communities in northern Saskatchewan to minimize any health and safety risks associated with travel to and from site.

In July, the Company announced the completion of a conceptual mining study, evaluating the use of the ISR mining method, for the Tthe Heldeth Túé (“THT”, formerly J Zone) deposit at the Waterbury Lake project and the initiation of a preliminary economic assessment (the “Waterbury PEA”).

In October, Denison provided an update on field activities at Wheeler River, with the completion of its 2020 ISR field program at Phoenix and the commencement of an ~12,000 metre exploration drilling program designed to test initially for extensions to known mineralization at Phoenix and then advance to regional targets for the discovery of satellite uranium deposits potentially amenable to ISR mining. The ISR field program included the installation of five additional monitoring wells (“MWs”) in two clusters, which will allow for long-term monitoring and the modelling of groundwater impacts through construction, operations and decommissioning of the proposed Phoenix mining project - important elements of the assessment of effects in an Environmental Impact Statement (“EIS”).

In November, Denison announced its decision to restart the formal EA process for Wheeler River effective January 2021. The decision to resume the EA process marked the end of the temporary suspension announced in March 2020 amidst the significant social and economic disruption that emerged as a result of the onset of the COVID-19 pandemic.

And in November, Denison announced the successful completion of the Waterbury PEA. The report for the Waterbury PEA, completed in accordance with NI 43-101, evaluates a THT ISR operation estimated to produce total mine production of 9.7 million pounds of uranium concentrates (“U₃O₈”) (177,664 tonnes at 2.49% U₃O₈) over an approximate six year mine-life with final processing occurring at Denison’s 22.5% owned McClean Lake mill with a base case pre-tax NPV of $177 million (8% discount rate), IRR of 39.1%, and initial capital expenditures of $111.6 million, excluding pre-construction evaluation and development costs. The base-case economic analysis assumes uranium sales are made at UxC LLC (“UxC”)’s forecasted annual “Composite Midpoint” spot price from the Q3 2020 Uranium Market Outlook, stated in constant dollars (from ~US$49/lb U₃O₈ to US$57/lb U₃O₈). The Waterbury PEA was prepared on a project (100% ownership) and pre-tax basis, as each partner to of the Waterbury Lake Uranium Limited Partnership is subject to different tax and other obligations. The technical report in support of the Waterbury PEA was filed on December 30, 2020. See “Mineral Properties – Waterbury”.

In December, Denison announced the completion of a trade-off study assessing the merit of adopting a freeze wall design as part of the ISR mining approach planned for Phoenix. Based on the results of the trade-off study, it was determined that a freeze wall design has the potential to offer significant environmental, operational, and financial advantages compared to the freeze cap (or freeze “dome”) design previously planned for the project and included in the 2018 PFS. Amongst the identified advantages was the ability to reduce the scope and cost of initial capital costs for the project and to allow for a phased approach to future mine development, including initial plans for five phases of development over the life of the operation. Based on the positive results of the trade-off study, the Company decided to adapt its plans for the project to use a freeze wall in future project design and environmental assessment efforts. See “Mineral Properties – Wheeler River”.

Financing Developments

In April, Denison completed a US$5.75 million bought deal public offering, issuing 28,750,000 Shares, including the exercise in full of the underwriters’ over-allotment option of 3,750,000 Shares. The shares were qualified for issuance pursuant to a final short form prospectus in all provinces of Canada (other than Quebec), and in the United States pursuant to a related registration statement on Form F-10, as amended (SEC File No. 333-237381), filed with the United States Securities and Exchange Commission (the “SEC”) under the Canada/U.S. multi-jurisdictional disclosure system.

In June, the Company filed a short form base shelf prospectus (“2020 Prospectus”) with the securities regulatory authorities in each of the provinces and territories of Canada and a registration statement on Form F-10, as amended (SEC File No. 333-238108) was filed with the SEC. The 2020 Prospectus related to the public offering for sale of certain securities and combinations of securities, for an aggregate offering amount of up to $175,000,000.

In October, the Company completed a bought deal equity offering (the “October 2020 Offering”) of 51,347,321 Shares, which included the partial exercise of the over-allotment option granted to the underwriters, for aggregate gross proceeds of approximately US$19 million. The October 2020 Offering was completed pursuant to a prospectus supplement to the 2020 Prospectus. Proceeds of the October 2020 Offering were used to fund evaluation and EA activities on the Wheeler River project in 2021, as well as for general working capital purposes.

In November, the Company announced it had entered into an equity distribution agreement (“EDA”) providing for an at-the-market (“ATM”) equity offering program, with Cantor Fitzgerald Canada Corporation, Scotia Capital Inc., Cantor Fitzgerald & Co. and Scotia Capital (USA) Inc. The intention of the ATM was to allow Denison to, through the agents and from time to time, offer and sell, in Canada and the United States by means of ordinary brokers’ transactions through the facilities of the TSX and/or NYSE American, such number of Shares as would have an aggregate offering price of up to US$20 million (the “2020 ATM”). The sale of the Company’s Shares through the 2020 ATM were made pursuant to and qualified by a prospectus supplement to the 2020 Prospectus. Denison, through its agents, issued 4,230,186 Shares under the 2020 ATM, at an average price of $0.93, for aggregate gross proceeds of approximately $3.9 million.

In December, Denison completed a non-brokered private placement of 1,081,959 Shares that qualify as "flow-through shares" for purposes of the Income Tax Act (Canada), at $0.86 per share, for gross proceeds of approximately $930,000 (the “2020 FT Offering”). The proceeds from the financing were used to fund a portion of the Company’s Canadian exploration activities in 2021.

Corporate Developments

In January, the Company amended and extended its credit facility with the Bank of Nova Scotia (the “Credit Facility”) to January 31, 2021.

And in January, Mr. Geun Park resigned from the Board. Mr. Jun Gon Kim joined the Board effective February 17, 2020, filling the vacancy created by Mr. Park’s resignation.

In July, Denison announced the London Court of International Arbitration had rendered a final award in favour of Denison in the arbitration between Denison and Uranium Industry a.s. (“UI”) with respect to the contingent proceeds of Denison’s sale to UI of its interest in the Gurvan Saihan Joint Venture in Mongolia in 2015 (the “Mongolia Transaction”). The arbitration panel declared that UI violated its obligations to the Company under the related agreements, and ordered UI to pay the Company US$10,000,000 plus interest at a rate of 5% per annum from November 16, 2016, plus certain legal and arbitration costs. The arbitration panel further dismissed all other claims and counterclaims. For further updates, see “Developments Over the Last Three Years – 2022… - Corporate Developments”.

2021…

Project Developments – Proposed Phoenix ISR Operation

In February, Denison announced that the company finalized its 2021 plans for the further assessment and de-risking of the ISR mining method planned for Wheeler River’s Phoenix deposit. To facilitate these plans, the Wheeler River Joint Venture (“WRJV”) approved a $24.0 million budget for 2021 (100% basis, Denison’s share $19.4 million), to fund activities including the resumption of the EA process, as well as the advancement of engineering studies, metallurgical testing, and a 2021 ISR field program. The detailed results of the 2021 ISR field program supported the permitting and preparation of the FFT (defined below) and the EIS and FS processes.

In July, Denison announced, as part of its 2021 ISR field program, it had completed the installation of a five-spot large-diameter commercial scale well (“CSW”) test pattern in the Phase 1 area of Phoenix Zone A (“Phase 1”), to facilitate further hydrogeologic testing and assessment of down-hole permeability enhancement tools. In addition, nine of eleven planned MWs were installed within the Phase 1 area, to facilitate ongoing observation of the current and future hydrogeological test work – allowing for detailed hydrogeological assessment and water quality sampling.

In August, Denison reported positive interim results from the ongoing ISR metallurgical test program. Test work consistently supported an ISR mining uranium head-grade for Phoenix in excess of the 10 g/L assumed in the 2018 PFS. Accordingly, the Company adapted its plans for the remaining metallurgical test work to reflect a 50% increase in the head-grade of uranium bearing solution (“UBS”) to be recovered from the ISR mining wellfield, of 15 g/L.

In October, the Company announced the initial results from the completion of the highly successful ISR field test program. The results from the field test were highlighted by the following:

Given consistently positive results from field and laboratory testing, Denison and the WRJV approved the initiation of the formal FS report process for the Phoenix ISR project, and appointed Wood PLC (“Wood”) as independent lead author of the FS.

For further information, see “Mineral Properties - Wheeler River - Evaluation Activities” below.

Project Developments – Wheeler River Regional Exploration

In January, the Company reported the results from its 2020 regional exploration program at Wheeler River, which included the discovery of new high-grade unconformity-hosted uranium mineralization along the K West conductive trend on the western side of the Wheeler River property, approximately four kilometers north-northwest of Phoenix. The uranium mineralization discovered is interpreted to straddle the unconformity contact of the underlying basement rocks and the overlying Athabasca sandstone. In addition to high-grade uranium, the assay results were highlighted by the presence of high-grade nickel.

In February, the Company reported the results from the 2020 exploration and expansion drilling program focused on the area proximal to Phoenix. As part of this program, 19 drill holes were completed for a total of approximately 7,400 metres – all of which were located outside of the extents of the mineral resources currently defined at Phoenix. The results from the program were highlighted by the intersection of high-grade uranium mineralization in Zone C, where no mineral resource is currently estimated: 5.69% U₃O₈ over 5.0 metres in WR-328D1, located approximately 22 metres northeast of historical mineralized hole WR-368 (1.59% U₃O₈ over 2.0 metres); and 8.84% U₃O₈ over 2.5 metres in WR-767D1, located approximately 35 metres to the northeast of WR-328D1.

In July, drill hole GWR-045 was completed as part of the ISR field test program as a MW to the northwest of the CSW test pattern. Based on the mineral resources currently estimated for Phoenix, GWR-045 was expected to intersect low-grade uranium mineralization on the northwest margin of the deposit, approximately 5 metres outside of the boundary of the Phoenix Zone A high-grade resource domain. However, the drill hole intersected a thick interval of high-grade unconformity-associated uranium mineralization grading of 22.0% eU₃O₈ over 8.6 metres. See “Developments Over the Last Three Years – 2022…” for detail of follow-up drilling results.

Other Project Developments

In April, Denison announced that new high-grade unconformity-hosted uranium mineralization was discovered during the winter 2021 exploration program completed at McClean Lake. The exploration program was operated by Orano Canada, 77.5% owner and operator of the MLJV. Three of the final four drill holes completed during the winter 2021 program returned uranium mineralization at the McClean South target area. Based on subsequently received assay results, the results were highlighted by drill hole MCS-34, which returned 8.67% U₃O₈ over 13.5 metres (including 78.43% U₃O₈ over 1.1 metres).

In November, Denison and Orano Canada announced the successful completion of a five-year test mining program deploying the patented Surface Access Borehole Resource Extraction (“SABRE”) mining method on the McClean Lake property. The program was highlighted by the completion of the final stage of the program from May to September 2021 with four mining cavities successfully excavated to produce approximately 1,500 tonnes of high-value ore ranging in grade from 4% U₃O₈ to 11% U₃O₈. The program was concluded with no safety, environmental or radiological incidents and confirmed the ability to achieve key operating objectives associated with the test program – including targets for cavity diameter, rates of recovery, and mine production rates. The majority of the ore recovered from the test mining program was transferred to the McClean Lake mill, resulting in the production of approximately 176,000 pounds of U₃O₈ (Denison’s share: approximately 40,000 pounds of U₃O₈) in the fourth quarter of 2021.

Financing Developments

In February, the Company completed a public offering by way of a prospectus supplement to the 2020 Shelf Prospectus of 31,593,950 units of the Company at US$0.91 per unit for gross proceeds of approximately US$28.8 million, including the full exercise of the underwriters’ over-allotment option, accounting for 4,120,950 units (the “February 2021 Offering”). Each unit consists of one Share and one-half of one transferable common share purchase warrant of the Company. Each full warrant is exercisable to acquire one Share of the Company at an exercise price of US$2.00 for 24 months after issuance. Proceeds of the February 2021 Offering are anticipated to be used to fund evaluation and environmental assessment activities in support of the advancement of the proposed Phoenix ISR uranium mining operation at Wheeler River, as well as for general working capital purposes.

In March, the Company completed a private placement of 5,926,000 Shares that qualify as "flow-through shares" for purposes of the Income Tax Act (Canada) at a price of $1.35 per share for gross proceeds of approximately $8 million (the “2021 FT Offering”), the proceeds of which were used on the Company’s exploration activities in 2021 and 2022. The income tax benefits of this issue have been renounced to subscribers with an effective date of December 31, 2021.

And in March, the Company announced the completion of a public offering by way of a prospectus supplement to the 2020 Shelf Prospectus of 78,430,000 units of the Company at US$1.10 per unit for gross proceeds of approximately US$86.3 million, including the full exercise of the underwriters’ over-allotment option, accounting for 10,230,000 units (the “March 2021 Offering”). Each unit consists of one common share and one-half of one transferable common share purchase warrant of the Company. Each full warrant is exercisable to acquire one Share of the Company at an exercise price of US$2.25 for 24 months after issuance.

Net proceeds of the March 2021 Offering were primarily used to fund the strategic purchase of U₃O₈ to be held by Denison as a long-term investment, intended to support the potential future financing of the advancement and/or construction of Wheeler River. Denison ultimately acquired 2.5 million pounds U₃O₈, at a weighted average price of $36.67 (US$29.66) per pound U₃O₈ (including purchase commissions of $0.05 (US$0.04) per pound U₃O₈) and a total cost of approximately $91.675 million. The uranium spot price appreciated to $53.25 (US$42.00) per pound U₃O₈ by December 31, 2021, resulting in a fair value gain on the Company’s physical uranium holdings of approximately $41.4 million for the year ended December 31, 2021.

In connection with the March 2021 Offering, Denison terminated the EDA, and ATM issuances pursuant thereto, as the aggregate issuances pursuant to prospectus supplements under the 2020 Prospectus, including the ATM and March 2021 Offering, neared the 2020 Prospectus limit for aggregate issuance price of securities qualified for issuance by the 2020 Prospectus.

In September, the Company filed a short form base shelf prospectus (“2021 Prospectus”) with the securities regulatory authorities in each of the provinces and territories of Canada and a registration statement on Form F-10, as amended (SEC File No. 333-258939) was filed with the SEC. The 2021 Prospectus relates to the public offering for sale of certain securities and combinations of securities, for an aggregate offering amount of up to $250 million during the 25-month period beginning September 16, 2021.

And in September, the Company announced it had entered into a new EDA for an ATM equity offering program, with Cantor Fitzgerald Canada Corporation, Scotia Capital Inc., Cantor Fitzgerald & Co. and Scotia Capital (USA) Inc. (the “ATM Program”). The intention of the ATM Program is to allow Denison to, through the agents and from time to time, offer and sell, in Canada and the United States by means of ordinary brokers’ transactions through the facilities of the TSX and/or NYSE American, such number of Shares as would have an aggregate offering price of up to US$50 million. The sale of the Company’s Shares through the ATM Program are made pursuant to and qualified by a prospectus supplement to the 2021 Prospectus. During 2021, the Company issued 3,840,000 Shares under the 2021 ATM. The Shares were issued at an average price of $2.08 per Share for aggregate gross proceeds of $7,975,000.

In October, the Company sold, by private agreement, 32,500,000 common shares of GoviEx Uranium Limited (“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 expiring April 26, 2023. Denison received gross proceeds of $15.6 million on the sale of the shares and warrants.

Corporate Developments

In January, the Company amended and extended its Credit Facility to January 31, 2022.

In March, 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 mining operation at Wheeler River, as well as an Exploration Agreement in respect of Denison’s exploration and evaluation activities within the ERFN traditional territories (the “ERFN Exploration Agreement”). 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.

And in March, the Company announced its inclusion in the S&P/TSX Composite Index – the headline index for the Canadian equity market – effective prior to the open of trading on Monday March 22, 2021.

In May, in connection with the Annual General Meeting of Shareholders, changes were made to the composition of the Company’s Board of Directors, with Mr. Jack Lundin and Ms. Catherine Stefan not standing for re-election at the meeting, and shareholders approving the appointment to the Board of Mr. David Neuburger and Ms. Jennifer Traub. In addition, Mr. Ron Hochstein was appointed Chair of the Board.

In July, Uranium Participation Corporation (“UPC”) completed an arrangement with Sprott Asset Management LP (“Sprott”) and certain affiliates, pursuant to which UPC was acquired by the Sprott Physical Uranium Trust. On completion of that transaction, 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.

In August, Denison completed the acquisition of 50% of JCU from UEX for cash consideration of $20.5 million (the “JCU Acquisition”) following UEX’s acquisition of 100% of JCU from Overseas Uranium Resources Development Co., Ltd. (“OURD”) for $41 million. JCU now 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 (“Cameco”) 69.901%), a 33.8118% interest in the Kiggavik project (Orano Canada 66.1882%), and a 34.4508% interest in the Christie Lake project (UEX 65.5492%).

In December, Denison formally adopted an Indigenous Peoples Policy (“IPP”), 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.

2022…

Project Developments – Wheeler River

In February, Denison announced that it completed three drill holes during the fall of 2021 to follow up on the discovery of high-grade uranium mineralization in drill hole GWR-045 at Phoenix, which was located outside of the previously defined extent of the high-grade domain of Phoenix Zone A. All three follow-up holes returned intervals of high-grade uranium mineralization. The results were highlighted by drill hole GWR-049, which was expected to intersect a narrow high-grade interval according to then-current modeling, but instead returned 24.9% eU₃O₈ over 4.2 metres.

In July, Denison announced that it received approval from the Province of Saskatchewan to prepare, construct, and operate the facilities required to carry out the ISR Feasibility Field Test (“FFT”) planned for the Phoenix deposit. The approval was granted by the Saskatchewan Minister of Environment and authorizes Denison to operate “pollutant control facilities”, which is typical for mining operations and allows for the management of material recovered from mineral extraction through to wastewater treatment, discharge, and storage (as applicable). The approval followed the completion of a process involving the review of and consultation on the Company’s permit application and supporting materials related to the FFT.

In August, the Company announced that it had received a Licence to Possess, Use, Store and Transfer a Nuclear Substance from the Canadian Nuclear Safety Commission (“CNSC”). With the receipt of this approval, the Company was fully permitted to operate the FFT facility and carry out the process of recovering a uranium bearing solution from the Phoenix ore body.

Also in August, Denison announced the substantial completion of extensive metallurgical test work to define the mechanical components for the planned Phoenix processing plant as part of the FS underway for Wheeler River. The test work confirmed the ability to produce a yellowcake product that meets industry standard ASTM C967-13 specifications.

In September, the Company reported the completion of the construction and wet commissioning of the lixiviant injection system for the FFT and commencement of the leaching phase of the FFT.

In October, the Company announced that it had successfully recovered uranium bearing solution from the ISR FFT at targeted rates and grades, indicating that the hydrogeological system at Phoenix was responding as expected with pH trends, flow characteristics, and uranium recovery meeting expectations. The preliminary results demonstrated the successful acidification of the test pattern and recovery of uranium using the ISR mining method. Given the highly successful results of the FFT, lixiviant injection ceased, and operations at the Phoenix FFT site transitioned from the leaching phase of the FFT to the neutralization phase.

Also in October, Denison announced a significant regulatory milestone for Wheeler River with the submission of the draft EIS to the Saskatchewan Ministry of Environment and the CNSC. The EIS submission outlines the Company’s assessment of the potential effects, including applicable mitigation measures, of the proposed ISR uranium mine and processing plant planned for Wheeler River, and reflects several years of baseline environmental data collection, technical assessments, plus extensive engagement and consultation with Indigenous and non-Indigenous interested parties.

In November, Denison announced the CNSC had completed its conformity review of the draft EIS submitted for the proposed ISR uranium mine and processing plant. The CNSC determined the draft EIS met the requirements for the advancement of the EA process, and the federal technical review of the EIS commenced.

In December, Denison announced highly successful results from long-term core leach metallurgical testing completed to further support the establishment of ISR production and recovery curves to be used in the FS. The Company completed a long-term test of a representative intact core sample using specialized equipment to replicate the in-situ leaching conditions of the Phoenix deposit. The results were highlighted by: (a) overall recovery of uranium in excess of 97% – demonstrating excellent recovery of uranium from intact high-grade core without the use of permeability enhancement; (b) average recovered solution uranium head grade of 18.3 g/L – exceeding the assumed 15 g/L uranium head grade being used in FS plant designs; (c) continuous intact core leach testing over a period of 377 days, with uranium recovery head grades consistently maintained above 5 g/L during the final stages of the production curve and then declining during the ramp-down stage; and (d) maximum recovered solution uranium head grade of 49.8 g/L achieved using similar lixiviant concentrations as to those used during the FFT.

And in December, Denison reported that the neutralization phase of the FFT had been successfully completed, advising that sampling of MWs around the FFT site confirmed the successful restoration of the leaching zone to environmentally acceptable pH conditions, as outlined in the applicable regulatory approvals for the FFT. The neutralization phase was initiated in mid-October, following the highly successful completion of the leaching phase of the FFT, and was designed to confirm certain environmental assessment assumptions and verify the efficiency and effectiveness of the neutralization process planned for ISR mining at Phoenix. The final phase of the FFT, which involves management of the recovered solution, is expected to commence in the spring of 2023.

Other Project Developments

In January, the Company announced that the CNSC approved an amendment to the operating licence for the MLJV and MWJV operations, which allows for the expansion of the McClean Lake Tailings Management Facility (“TMF”) and accepts the associated revised Preliminary Decommissioning Plan (“PDP”) and cost estimate. See “Denison’s Operations – McClean Lake Mill – Mill Licence” for more information.

In March, Denison reported that multiple new high-grade intercepts of unconformity-hosted uranium mineralization were discovered in the final three drill holes completed during the winter 2022 exploration program at the Waterfound property, operated by Orano Canada. Denison holds an effective 24.68% ownership interest in Waterfound through its direct interest in the joint venture and its 50% ownership of JCU. The results were highlighted by drill hole WF-68, which returned a broad zone of uranium mineralization, including a peak interval of 5.91% eU₃O₈ over 3.9 metres (0.05% eU₃O₈ cut-off) with a sub-interval grading 25.30% eU₃O₈ over 0.7 metres, located approximately 800 metres west, along the La Rocque Conductive Corridor, of the previously discovered high-grade mineralization (including 4.49% U₃O₈ over 10.53 metres) at the Alligator Zone.

In April, Denison completed the sale of 40,000 pounds of U₃O₈, representing the Company’s share of production from the SABRE test mining program completed at the MLJV in 2021. The uranium was sold at a price of $74.65 (US$59.25) per pound U₃O₈.

In September, Denison announced that assays received from exploration drilling completed at McClean Lake during the winter of 2022 resulted in a significant expansion of the high-grade unconformity-hosted zone of uranium mineralization discovered in 2021 between the McClean South 8W and 8E pods. Ten drill holes completed during 2022 by Orano Canada returned notable uranium mineralization, including drill hole MCS-58, which returned 2.96% U₃O₈ over 15.5 metres, including 24.49% U₃O₈ over 1.5 metres, located approximately 54 metres to the southeast of drill hole MCS-34, which was completed in 2021 and returned a mineralized interval of 8.67% U₃O₈ over 13.5 metres. Overall, the results from 2022 have successfully expanded the footprint of the mineralized zone to approximately 180 metres in strike length.

Also in September, Denison announced that uranium mineralization was encountered in three of the seven drill holes completed during the summer exploration program at Waterfound, highlighted by drill hole WF-74A, which intersected 4.75% eU₃O₈ over 13.3 metres, including a sub-interval grading 25.23% eU₃O₈ over 0.5 metres. The mineralized intersection from WF-74A represents the best mineralized hole drilled on the Waterfound property to date and highlights the potential for the discovery of additional high-grade uranium mineralization further along strike to the west of the Alligator Zone.

Financing Developments

During 2022, the Company issued 11,042,862 shares under its ATM Program. The common shares were issued at an average price of $1.83 per share for aggregate gross proceeds of $20,200,000. The Company also recognized issue costs of $599,000 related to its ATM Program share issuances which includes $404,000 of commissions and $195,000 other costs associated with the maintenance of the ATM Program. See “Denison’s Securities – ATM Program Activity”.

Corporate Developments

In January, the Company amended and extended its Credit Facility to January 31, 2023.

Also in January, the Company executed a Repayment Schedule Agreement (the “Repayment Agreement”) with Uranium Industry a.s. (“UI”) pursuant to which the parties negotiated the repayment of the debt owing from UI to Denison with respect to the contingent proceeds of the Mongolia Transaction. In accordance with the Repayment Agreement, the Company received aggregate installment payments in 2022 of US$4,800,000.

And in January, Denison announced the appointment of Ms. Laurie Sterritt to the Board of Directors and the appointment of Mr. Kevin Himbeault as the Company’s Vice President Plant Operations & Regulatory Affairs.

In February, Mr. Jun Gon Kim resigned from the Board. Mr. Yun Chang Jeong joined the Board in early March 2022, filling the vacancy created by Mr. Kim’s resignation.

In April, in connection with the updated PDP and related decrease in the financial assurances required for the MLJV and MWJV reclamation obligation, the Company entered into a further amendment with respect to the Credit Facility pursuant to which the pledged amount of cash required under the Credit Facility was decreased and the additional cash collateral was released.

In May, at Denison’s Annual General Meeting of Shareholders, Mr. Bob Dengler did not stand for re-election to the Board.

In June, Denison and Kineepik Métis Local #9 (“KML”) entered into a Participation and Funding Agreement (the “KML PFA”), which expresses Denison’s and KML’s mutual commitment to the co-development of an agreement supporting the advancement of the Phoenix ISR project. The KML PFA builds on an existing letter agreement between Denison and KML with respect to the support of KML’s contributions to, and participation in, the Federal and Provincial EA process. The parties also entered into an Exploration Agreement (the “KML Exploration Agreement”) in respect of Denison’s exploration and evaluation activities within KML’s land and occupancy area. These agreements reflect Denison’s commitment to the principles set out in the Company’s IPP and advancing reconciliation through taking action.

In October, Denison announced that it entered into an exploration agreement (the “YNLRO Exploration Agreement”) with the Ya’thi Néné Lands and Resources Office (“YNLRO”), Hatchet Lake Denesułiné First Nation, Black Lake Denesułiné First Nation, Fond du Lac Denesułiné First Nation (collectively, the “Athabasca Nations”) and the Northern Hamlet of Stony Rapids, the Northern Settlement of Uranium City, the Northern Settlement of Wollaston Lake and the Northern Settlement of Camsell Portage (collectively, the “Athabasca Communities”) in respect of Denison’s exploration and evaluation activities within the traditional territory of the Athabasca Nations (the “Nuhenéné”). The YNLRO Exploration Agreement expresses the parties’ intention to build a long-term relationship between Denison and the YNLRO, Athabasca Nations, and Athabasca Communities. Denison wishes to conduct and advance its exploration activities in a sustainable manner that respects the Athabasca Nations’ Indigenous rights, advances reconciliation with Indigenous peoples, and provides economic opportunities and other benefits to the Athabasca Communities in an authentic, cooperative and respectful way.

In December, the Company amended the terms of the Credit Facility to extend the maturity date to January 31, 2024, and to increase the credit available under the facility to cover additional standby letters of credit with respect to environmental obligations associated with the FFT activities at Wheeler River.

And in December, Mr. David Bronkhorst retired from his position as Vice President Operations of Denison, remaining with the Company in a technical advisory role. Concurrently therewith, Mr. Himbeault became Vice President Operations & Regulatory Affairs.

2023 Recent Developments…

In February, Mr. Yun Chang Jeong resigned from the Board. Mr. Byeong Min An joined the Board in early March 2023, filling the vacancy created by Mr. Jeong’s resignation.

The Uranium Industry 2022

During the year ended December 31, 2022, both the uranium spot price and long-term price continued their upward trend. In the spot market, the price of uranium started the year at US$42.00 per pound U₃O₈, and increased to a high of US$63.75 per pound U₃O₈ in April 2022, before declining to end the year at US$48.00 per pound U₃O₈ – a 14% increase year over year. A similar price increase was observed in the long-term market, with the long-term price steadily increasing throughout the year from US$40.50 per pound U₃O₈ at December 31, 2021 to US$51.00 per pound U₃O₈ at December 31, 2022. This US$10.50 per pound U₃O₈ increase in the long-term price is the largest annual gain since 2007.

Investor interest in the uranium and nuclear energy sectors continued in 2022. This is believed to largely be driven by a renewed focus on global goals to achieve net-zero carbon emissions, and the necessary role for nuclear energy in the “clean energy transition”. In assessing the potential paths to reduce carbon emissions many nations, policymakers, and interest groups have recognized the critical role that their existing or planned future nuclear power plants play in achieving decarbonization objectives.

During 2022, there were several notable developments representative of the global trend of increased investment in nuclear energy:

Forecasts from UxC in their Uranium Market Outlook for Q4 2022 (the “Q4 2022 Outlook”) estimate global reactor units and nuclear power capacity in 2035 to be 512 units and 488.6 megawatts electrical (“Mwe”) installed capacity. This represents a 26% increase in global nuclear power generation from current levels and a continued acceleration in growth from previous estimates. Accordingly, UxC’s base case estimate of global uranium demand in 2035 increased an additional 5% - from 229 million pounds U₃O₈ (estimated as of Q4’2021, and already increased from 209 million pounds U₃O₈ estimated as of Q4’2020) to the current estimate of 240 million pounds U₃O₈ (estimated as of Q4’2022).

Positive investor sentiment in the early part of 2022 led to continued spot market demand from physical uranium funds, with UxC’s estimates that at least 20 million pounds U₃O₈ was acquired by secondary sources, including physical uranium funds in 2022. While not as significant as the 53 million pounds U₃O₈ purchased as secondary demand in 2021, continued purchasing from secondary sources in 2022 provided useful support for spot uranium prices throughout the year.

On the supply side, uranium production for 2022 is estimated at 133 million pounds U₃O₈, which represents a 6% increase over 2021 production levels, largely due to the restart of the McArthur River mine as well as higher production at other mines (many of which were impacted by the COVID-19 pandemic in 2021). Total utility demand for 2022, as reported in the Q4 2022 Outlook is estimated at 193 million pounds U₃O₈, resulting in a significant primary supply shortfall of approximately 61 million pounds U₃O₈, or 32%.

According to the Q4 2022 Outlook, while primary production is estimated to increase to 143 million pounds U₃O₈ in 2023, with the anticipated restart of certain curtailed mines, as well as slight production increases projected at various operating mines, a significant primary supply deficit is still expected to exist in contrast to base case demand, which is estimated at 194 million pounds U₃O₈. Similar to 2022, it is expected that the excess of demand over primary production in 2023 will be supplied by secondary sources (including commercial inventories, reprocessing of spent fuel, and inventories held by governments). Parties holding or with access to these secondary sources of supply, however, have become increasingly more sensitive to price, particularly as sources of secondary supply are expected to fall by 30% in 2023, as pandemic-related production curtailments in 2020 and 2021 and strong secondary demand in past years accelerated the process of commercial uranium inventory drawdown.

The Russian invasion of Ukraine in February 2022 caused significant turmoil in the global nuclear fuel market. Russia is a significant supplier of enriched uranium to the rest of the world, operating 46% of the world’s uranium enrichment capacity. In 2021, Russian enrichment comprised 31% of European Union enrichment purchases and 28% of US utility enrichment purchases. While deliveries of material from Russia to Western utilities continue uninterrupted, increased demand for non-Russian supply has led to significantly increased prices for uranium processing services. From December 2021 to December 2022, the long-term price of conversion and enrichment services increased by 47% and 123%, respectively. In the short- to medium-term, in order to increase enriched uranium production in the supply-constrained Western enrichment market, Western enrichers are likely to input more UF₆ (‘overfeed’) into their centrifuges in order maximize production capacity. As a consequence, enrichment customers in aggregate will require more natural uranium feedstock to produce the same quantity of enriched uranium (i.e., new enrichment contracts are being executed with higher tails assay levels).

Russia is also a key part of the global uranium logistics chain, with significant quantities of uranium from Central Asia transported through Russia to Russian ports for delivery to Western uranium conversion facilities. Uranium production from Kazakhstan and Uzbekistan, which together represent 52% of global primary uranium production in 2021, often travel through Russia for delivery to Western facilities. As a result, logistics of uranium shipped through Russia remains an item of concern to uranium end users. Some uranium has been successfully shipped from Kazakhstan to Canada via the Trans-Caspian International Transport Route, which does not include transit through Russia; however, these shipments are limited to less than 20% of Kazakhstan’s annual uranium production due to quota restrictions.

Overall, while the return of idled or curtailed production from existing uranium mining operations, if successful, is broadly expected to provide the support necessary to balance supply deficits through 2025, the accelerated decline in secondary sources of supply in recent years, the depletion of existing mines, the expectation of rising tails assay at Western enrichment plants, and growing future reactor demand, point to larger supply deficits during the second half of the decade that will be difficult to balance without considerable investment in new large-scale uranium mining projects. Given that uncovered utility uranium requirements for the period from 2023 to 2040, not including typical inventory building or restriction on existing supply agreements with Russia, are estimated at 2.3 billion pounds U₃O₈, it is evident that the necessary future sources of supply required by the market have not yet been secured by utilities, and that once incumbent suppliers have responded to future demand, there is good reason to expect a further phase of utility procurement directed at incentivizing new projects to meet long-term demand needs.

Uranium Demand

According to UxC’s Q4 2022 Outlook, global nuclear power capacities are projected to increase to 441 reactors in 34 countries in 2025, generating approximately 402 gigawatts of electricity (“GWe”). By 2040, nuclear power capacities are expected to be 556 reactors, generating approximately 538 GWe in 40 countries.

According to the WNA, as of February 2023, current nuclear generation equates to approximately 10% of the world's electrical requirements, with thirteen countries producing 25% or more of their country’s electricity from nuclear.

Additionally, the WNA reports that there are currently 58 nuclear reactors under construction in 18 countries with the principal drivers of this expansion being China (21 reactors under construction), India (8), Turkey (4), South Korea (3), and Russia (3). In addition, there are another 104 reactors currently planned around the world.

In the Q4 2022 Outlook, UxC estimates base case demand will be 194 million pounds U₃O₈ in 2023. UxC also estimates that annual uranium demand could grow to 259 million pounds U₃O₈ under their base case by 2040 and to 348 million pounds U₃O₈ in their high case for the same period.

Primary Uranium Supply

UxC’s Q4 2022 Outlook estimates that world uranium production for 2023 is expected to be approximately 143 million pounds U₃O₈, increased from 2022’s estimated production of 133 million pounds U₃O₈.

The Q4 2022 Outlook estimates that Cameco’s Cigar Lake project will produce 15 million pounds U₃O₈ in 2023 then decrease to 13.5 million pounds U₃O₈ from 2024 to 2031 before ceasing production in 2032. The Q4 2022 Outlook also estimates that Cameco’s McArthur River mine, which restarted in 2022, will increase production to 15 million pounds U₃O₈ in 2023 and then to 18 million pounds U₃O₈ by 2029. Subsequent to the release of the Q4 2022 Outlook, Cameco announced that due to improved uranium market conditions, Cigar Lake will instead continue to operate at its licensed capacity of 18 million pounds U₃O₈ and the plan will be for McArthur River to increase production to 18 million pounds U₃O₈ per year starting in 2024.

Based on the Q4 2022 Outlook, Canada is expected to be the world’s second largest uranium producing nation, accounting for more than 17% of expected 2023 global production. Kazakhstan is expected to continue to be the world’s largest producer of uranium in 2023, by a large margin, representing more than 41% of expected production. Australia and Namibia are each expected to contribute approximately 10% of expected 2023 production.

UxC estimates in its Q4 2022 Outlook that existing mine production, plus new planned and potential mine production under its base case, will reach a peak of 172 million pounds U₃O₈ by 2029, before declining back down to 93 million pounds U₃O₈ by 2040. While Kazakhstan is seen to maintain relatively consistent supply in future years, it is expected to decline significantly approaching 2035. In order for other projects to move forward and increase production forecasts, UxC believes uranium prices will need to increase appreciably to support higher cost production profiles and the significant capital expenditures that will be required.

Secondary Uranium Supply

In the Q4 2022 Outlook, primary mine production in 2023 is estimated to supply approximately 74% of the year’s estimated base case demand, with the balance of demand expected to be supplied from secondary sources. These sources include commercial inventories, reprocessing of spent fuel, sales by uranium enrichers and inventories held by governments, such as the U.S. Department of Energy, and the Russian government. Primary mine production’s share of annual demand remains lower than pre-2017 levels, in which primary production made up 85% or more of annual demand.

Secondary supplies remain a complexity of the uranium market. The Q4 2022 Outlook forecasts that 38 million pounds U₃O₈ will enter the market from secondary supplies in 2023. What remains unclear, and adds to the complexity of secondary supplies, is at what price level these additional sources of supply are incentivized to the market to fill the gap left by the primary supply deficit.

Though excess commercial inventories, which were one of the major sources of secondary supplies during the period from the early 1970s to the early 2000s, were largely consumed in that same period, the planned shutdown of nuclear programs in countries like Germany and the delayed restart of the Japanese nuclear program have contributed to commercial inventories again becoming a more significant factor. Government inventories also continue to contribute to the secondary supply picture, particularly in the U.S. and Russia. The disposition of these commercial and government inventories may have a market impact in the near to medium term, although, UxC expects their role will diminish over time as these inventories continue to be depleted.

In general, UxC expects that secondary sources of supply will fall significantly from estimated 2023 levels of 38 million pounds U₃O₈ to less than 16 million pounds U₃O₈ per year by 2040.

Uranium Prices

Uranium spot prices reflect current or near-term deliveries. As much of the industry’s volumes occur in the long-term market, the spot market tends to reflect the availability of discretionary supplies relative to discretionary demand. Accordingly, when the availability of uranium in the near-term is comparatively sparse relative to buying interest, the uranium spot price can increase rapidly and significantly. Similarly, where discretionary demand at any given time is comparatively soft relative to sellers holding discretionary supplies, the spot price can decrease rapidly. Given the discretionary nature of the spot market, predicting uranium spot prices normally proves to be a difficult task.

With respect to long-term prices, utility uncovered requirements and long-term demand have significant influence on market dynamics. Historically, nuclear utilities have purchased uranium primarily through long-term contracts. These contracts often provide for deliveries beginning two to four years after they are signed with delivery typically extending anywhere from three or four years to ten years or more. In awarding medium and long-term contracts, electric utilities consider the producer’s uranium reserves, record of performance and production cost profile, in addition to the commercial terms offered. Prices are established by a number of methods, including base prices adjusted by inflation indices, reference prices (generally spot price indicators, but also long-term reference prices) and annual price negotiations. Contracts may also contain annual volume flexibility, floor prices, ceiling prices and other negotiated provisions. Under these contracts, the actual price mechanisms are usually confidential, which means that information available to the market is often incomplete.

The long-term uranium demand that actually enters the market is affected in large part by utilities’ uncovered requirements. This is the amount of uranium required by utilities to operate their fleet that is not yet covered by purchase contracts with suppliers. UxC estimates, in the Q4 2022 Outlook, that uncovered demand for 2023 will be 8 million pounds U₃O₈. Of course, this uncovered demand increases over time and is projected by UxC to increase significantly over the next decade. For example, while more than 32 million pounds U₃O₈ are projected to remain uncovered for 2025, this number grows to over 115 million pounds U₃O₈ for 2030 and over 175 million pounds U₃O₈ for 2035. For 2040, this number grows to over 210 million pounds U₃O₈ of uncovered demand, or roughly 81% of annual expected base case demand projected for that year. In total nearly 2.3 billion pounds U₃O₈ are estimated to be uncovered between 2023 and 2040.

According to UxC in their Q4 2022 Outlook, uncovered demand for 2040 is estimated at 210 million pounds U₃O₈, which is approximately 117 million pounds U₃O₈ more than total production expected from existing uranium mines for the same year, which UxC estimates at 93 million pounds U₃O₈. Uncovered demand for 2040 also exceeds the combined supply available from primary production and secondary sources by approximately 101 million pounds U₃O₈. To put these shortfalls into perspective, the McArthur River mine represents the world’s largest uranium mine, with estimated annual production for 2024 of 18 million lbs U₃O₈, meaning that even after considering secondary supplies, additional annual supplies equivalent to nearly six McArthur River mines are required to respond to the industry’s uncovered requirements by 2040.

Increases in long-term contracting by utilities is expected to address the rising portion of demand that is uncovered. From 2006 to 2010, on average, 39 million pounds U₃O₈ equivalent were purchased on the spot market per year and roughly 200 million pounds U₃O₈ equivalent were contracted in the long-term market each year. In recent years, including in 2021, spot market purchasing exceeded long-term contracting, which declined to as low as approximately 25 million pounds U₃O₈ in 2013. However, 2022 saw a return to greater long-term contracting, with 113.1 million pounds U₃O₈ equivalent contracted in the long-term market and only 60.8 million pounds U₃O₈ equivalent purchased on the spot market in 2022. Considering contract volumes over the past year remain well below annual requirements, and uncovered requirements are increasing out in time, long-term contracting activity is expected to continue to increase in the future as utilities look to secure future supply to fuel the world’s growing fleet of nuclear reactors.

The long-term price is published on a monthly basis and increased by 26% in 2022, starting the year at US$40.50 per pound U₃O₈ and ending the year at US$51.00 per pound U₃O₈. Nuclear utilities procure their remaining uranium requirements through spot and near-term purchases from uranium producers, traders, and other suppliers. Historically, spot prices are more volatile than long-term prices. The spot price began 2022 at US$42.50 per pound U₃O₈, and increased during the year, in part as a result of the market response to the Russian invasion of Ukraine, to reach a high of $63.75 before retreating to US$48.00 per pound U₃O₈ at year end.

Competition

The uranium industry is small compared to other commodity or energy industries. Uranium demand is international in scope, but supply is characterized by a relatively small number of companies operating in only a few countries. Primary uranium production is concentrated amongst a limited number of producers and is also geographically concentrated with more than 79% of the world’s production in 2023 projected to be coming from only four countries: Kazakhstan, Canada, Australia and Namibia. Producers compete for market share and commercial terms necessary to support project economics. This is complicated by the influence of state-owned-enterprises that operate within the uranium mining industry, often producing uranium supply as part of a vertical integration strategy that may be less sensitive to uranium pricing than those operating uranium mines as a primary business.

Competition is somewhat different amongst exploration & development companies focused on the discovery or development of a uranium deposit. Exploration for uranium is being carried out on various continents, but in recent years development activities by public companies have been generally concentrated in Canada, Africa and Australia. In Canada, exploration has focused on the Athabasca Basin region in northern Saskatchewan. Explorers have been drawn to this area by the high-grade uranium deposits that have produced some of the most successful uranium mining operations in recent history. Within the Athabasca Basin region, exploration is generally divided between activity that is occurring in the eastern portion of the Basin and the western portion of the Basin. The eastern portion of the Basin is a district that is defined by rich infrastructure associated with existing uranium mines and uranium processing facilities. Infrastructure includes access to the provincial power grid and a network of provincial all-weather highways. By comparison, in the western portion of the Basin, there are no uranium mines or processing facilities and access to the provincial power grid is not currently available. Several uranium discoveries have been made in the Athabasca Basin region in recent years, and competition for capital, high-quality properties and professional staff can be intense.

Mineral Reserves and Mineral Resources

NI 43-101 requires mining companies to disclose mineral reserve and resource estimates using the subcategories of proven mineral reserves, probable mineral reserves, measured mineral resources, indicated mineral resources and inferred mineral resources.

Each of Andy Yackulic, P.Geo., Denison’s Director Exploration, and Chad Sorba, P.Geo, Denison’s Director Technical Services, is a “Qualified Person” in accordance with the requirements of NI 43-101, and has reviewed and approved all disclosure of scientific or technical information in this AIF.

Denison Mineral Reserves and Mineral Resources

The following tables show the Company's current estimates of mineral reserves and mineral resources as at December 31, 2022. For more information about the Company’s material properties, see “Mineral Properties”.

Proven Mineral Reserve Estimates ^(1,14)

Probable Mineral Reserve Estimates ^(1,2,3,4,15)

Indicated Mineral Resource Estimates ^(1,5,15)

Inferred Mineral Resource Estimates ^(1,6,15)

Historical Estimates

A qualified person has not done sufficient work to verify and classify these historical estimates as current mineral resources for the Company or confirm their reporting of resources is in accordance with NI 43-101 categories, though the Company has no reason to believe the information is not relevant or reliable. The Company is not treating this information as current mineral resources. As these do not represent material properties for the Company at this time, the Company does not currently have any plans to conduct work to verify the historical estimates.

JCU Estimates

Historical Indicated Mineral Resource Estimates ⁽¹⁵⁾

Historical Inferred Mineral Resource Estimates ⁽¹⁵⁾

McClean South

McClean South Historical Estimates ⁽¹⁶⁾

Notes to Mineral Resource and Mineral Reserve & Historical Estimates Tables:

Mineral Properties

Denison’s mineral property interests are located in the Athabasca Basin region of northern Saskatchewan, the majority of which are located in the eastern portion of the Athabasca Basin, which is host to considerable existing infrastructure including uranium mines and mills, and provincial powerlines and highways (see location map, below). As at December 31, 2022, Denison has direct interests in 32 mineral properties in the Athabasca Basin, comprised of 210 claims covering 295,328 hectares. Denison holds additional indirect interests in various uranium project joint ventures in Canada through its 50% ownership interest in JCU.

Denison’s exploration and evaluation operations in Saskatchewan, including its office in Saskatoon and various project interests in northern Saskatchewan, are located in regions covered by Treaty 6, Treaty 8 and Treaty 10, which encompass the traditional lands of the Cree, Dakota, Déne, Lakota, Nakota, Saulteaux, within the homeland of the Métis and within Nuhenéné.

Location Map of Denison’s Athabasca Basin Mineral Properties

Athabasca Basin Overview

The Athabasca Basin covers an area of approximately 100,000 square kilometres in northern Saskatchewan and northeastern Alberta. The Athabasca Basin is one of the principal uranium-producing districts in the world and is host to the world’s highest-grade and some of the world’s largest uranium mines and deposits, including the McArthur River mine and Cigar Lake mine located in the eastern Athabasca Basin.

The uranium deposits are classified as unconformity-associated (also unconformity-related and –type) deposits owing to their spatial association with a major unconformable contact between a relatively undeformed Proterozoic sedimentary basin (the Athabasca Basin) and underlying metamorphosed and deformed Archean to Palaeoproerozoic basement rocks.

A broad variety of unconformity-associated deposit shapes, sizes, and compositions have been discovered. Two distinct varieties have been classified; 1) ‘egress-style’ polymetallic lenses at and above the unconformity, with variable and often highly elevated base metal and rare earth elements (“REE”) contents, and 2) ‘ingress-style’ vein sets within basement rocks, with typically lower base metal and REE contents.

Egress-style deposits can occur in the sandstone, directly above the unconformity (e.g., Cigar Lake, Sue A and B), straddling the unconformity (e.g., Phoenix, Collins Bay B Zone, Midwest Main, Midwest A, McClean North, Key Lake) or perched high above the unconformity (certain zones at McClean Lake, Midwest, Cigar Lake). Ingress-style deposits are located in the basement rocks (e.g., Gryphon, Huskie, Eagle Point, Sue C, Sue E, Millennium, Arrow, Triple R); however, the Millennium deposit and, to an extent, the Gryphon deposit also contain subordinate mineralization at and above the unconformity. The Shea Creek deposits contain mineralization in the basement, deep in the basement, at the unconformity, and perched in the sandstone. In some deposits, there is a plunge to the mineralized pods from sandstone-hosted to basement-hosted within deposit–scale strike lengths (e.g., the Rabbit Lake-Collins Bay-Eagle Point trend, Sue trend deposits, McClean North).

The Athabasca unconformity-associated deposits are typically related to graphite-bearing structural zones within the metamorphosed and deformed Archean to Palaeoproerozoic basement rocks, which are often termed ‘corridors’ or ‘trends’. Alteration ‘halos’ or ‘envelopes’ tend to surround the mineralization, most notably in the overlying sandstone, and provide an enlarged exploration target through the detection of diagnostic alteration clays and geochemical pathfinder elements. Empirical exploration for the deposits typically involves mapping of structural corridors/trends by geophysical methods (dominantly electromagnetics, resistivity, or magnetics), followed by drill testing, given the buried or blind nature of the deposits below glacial cover or Athabasca sandstone, respectively. Drill core is subject to a variety of sampling and analytical methods to determine possible vectors toward mineralization, and downhole surveying is commonplace to test for elevated radioactivity or reconcile geophysical responses. The significant number of Athabasca uranium discoveries to date has also led to the development of numerous exploration models which are commonly used to facilitate interpretations and prioritize target areas.

Historical uranium production in the Athabasca Basin region used conventional open pit mining methods, such as the operations at Rabbit Lake, Cluff Lake, Key Lake and McClean Lake. Later in the mine life of Cluff Lake and Rabbit Lake, there was a transition to underground mining of other deposits on those properties.

The discovery of high-grade deposits such as Midwest, McArthur River and Cigar Lake in the 1980s did not immediately lead to production. The combination of challenging ground conditions (most notably the friable and water-saturated Athabasca sandstone conditions above the mineralization), depth, and the high-grade nature of the deposits, required extensive research and development to design safe extraction methods before production was possible. Production from McArthur was achieved in the early 2000s, while Cigar Lake only initiated production in 2014. Production from these mines was only made possible by their unique combination of high grades (average grades > 10% U₃O₈) and large scale (>300 million lbs U₃O₈), as well as the development of innovative mining techniques, including ground freezing combined with either raise-bore mining or the use of the jet-boring mining system (“JBS”). The Midwest deposits are smaller in size than McArthur River and Cigar Lake, and remain undeveloped.

In terms of mineral processing, each historical mining operation included a dedicated processing plant: Cluff Lake, Key Lake, Rabbit Lake and McClean Lake operations included on-site processing plants. Due to the rising cost of construction for such facilities and the availability of highways and other infrastructure in Saskatchewan’s North, processing of ores has transitioned to toll milling at existing facilities. McArthur River ore production is toll milled at the Key Lake mill, while Cigar Lake production is toll milled at the McClean Lake mill. With the suspension of operations at Rabbit Lake in 2016 and McArthur River in 2018, in part due to a prolonged slump in the global uranium market, only the Cigar Lake mine and the McClean Lake mill continued to operate and produce yellowcake in Saskatchewan during 2021.

In response to the COVID-19 pandemic, the Cigar Lake Joint Venture, operated by Cameco, temporarily suspended production at the Cigar Lake mine from the end of March 2020 until September 2020, and then again from the end of December 2020 until April 2021. Coordinated therewith, the MLJV suspended operations at the McClean Mill for the duration of the suspended production.

In February 2022, Cameco announced its intention to restart uranium production at its McArthur River uranium mine and Key Lake uranium mill in 2022 — while at the same time outlining its intention to, together with Orano, continue to limit overall production at McArthur River and Cigar Lake well below full production rates. In February 2023, Cameco announced that due to improved uranium market conditions, Cigar Lake will instead continue to operate at its licensed capacity of 18 million pounds U₃O₈ and the plan will be for McArthur River to increase production to 18 million pounds U₃O₈ per year starting in 2024.

Wheeler River

The Wheeler River project is the largest undeveloped uranium project in the infrastructure-rich eastern portion of the Athabasca Basin region, in northern Saskatchewan. 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 JCU (10%). Denison is the operator/manager of the project.

The 2018 PFS for the Wheeler River project considers the potential economic merit of developing the Phoenix deposit as an ISR operation, with an estimated average operating cost of $4.33 (US$3.33) per pound U₃O₈, and the Gryphon deposit as a conventional underground mining operation. The ISR mining operation planned for Phoenix would see associated processing to a finished product occurring at a processing plant to be built on site. The Gryphon deposit is designed as an underground mining operation, utilizing a conventional long hole mining approach with processing of mine production assumed at Denison's 22.5% owned McClean Lake mill.

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 base-case economic analysis assumes uranium sales are made at UxC Consulting Company, LLC's (“UxC”) then annual estimated spot price (composite mid-point scenario) for mine production from Phoenix (from ~US$29/lb U₃O₈ to US$45/lb U₃O₈), and a fixed price for mine production from the Gryphon deposit (US$50/lb U₃O₈). The 2018 PFS is prepared on a project (100% ownership) and pre-tax basis, as each partner to the WRJV is subject to different tax and other obligations. The results of the 2018 PFS are described in greater detail below.

A technical report entitled “Prefeasibility Study Report for the Wheeler River Uranium Project Saskatchewan, Canada” dated October 30, 2018 (the “Wheeler PFS Report”) has been prepared for the project, a copy of which is available on the Company’s website.

The Wheeler PFS Report describes the results of the 2018 PFS for the Wheeler River project with an effective date of September 24, 2018, based in part upon the mineral resource estimates for the Gryphon deposit effective January 30, 2018 and the Phoenix deposit effective May 28, 2014.

Except as otherwise indicated, the following project description is a summary, supported by the Wheeler PFS Report. We recommend you read the Wheeler PFS Report in its entirety to fully understand the technical aspects of the project. The conclusions, projections and estimates included in this description are subject to the qualifications, assumptions and exclusions set out in the Wheeler PFS Report and in the “Risk Factors” set forth below; in particular, any advancement or development of the Wheeler River project is subject to attainment of any required approvals, agreements or resources, including capital funding.

As a result of the social, financial and market disruptions experienced from the onset of the COVID-19 pandemic in early 2020, Denison temporarily suspended certain activities at Wheeler River, including the Environmental Assessment program; the EA program is on the critical path to achieving the project development schedule outlined in the 2018 PFS. While the EA process formally resumed in 2021 and the draft EIS was submitted to the regulators in 2022, the Company is not currently able to estimate the impact of the delay on the project development schedule outlined in the 2018 PFS, and users are specifically cautioned that the estimates provided therein regarding the start of pre-production activities in 2021 and first production in 2024 should not be relied upon.

Property Description, Location and Access

The property is located along the eastern edge of the Athabasca Basin in northern Saskatchewan, Canada and is located approximately 35 km north-northeast of the Key Lake mill and 35 km southwest of the McArthur River uranium mine.

Location Map, Showing Regional and Proposed Infrastructure.

Access to the property is by road from Saskatoon and by float supported fixed wing aircraft from other northern Saskatchewan settlements. The property is well located with respect to all-weather roads and the provincial power grid. Vehicle access to the property is by the provincial highway system to the Key Lake mill, then by the ore haul road between the Key Lake and McArthur River operations to the eastern part of the property. An older access road, the Fox Lake Road, between Key Lake and McArthur River, provides access to most of the northwestern side of the property. Gravel and sand roads and drill trails provide access by either four-wheel-drive or all-terrain vehicle to the rest of the property.

The property consists of 19 mineral claims totaling 11,720 hectares, with an aggregate annual requirement of $293,000 in either work or cash to maintain title to the mineral claims. Based on previous work submitted and approved by the province of Saskatchewan, title is secure until 2041.

The Wheeler River property is located within the boundaries of Treaty 10 (entered into between the Government of Canada and the First Nations People of Saskatchewan and Alberta). It is also located within the traditional territory of the English River First Nation, within the homeland of the Métis and within Nuhenéné.

Any uranium produced from the Wheeler River property is subject to uranium mining royalties in Saskatchewan in accordance with Part III of The Crown Mineral Royalty Regulations. See “Government Regulation - Canadian Royalties.” There is also a 10% Net Profits Interest (“NPI”) associated with the property held by the WRJV in proportion to the ownership interests of each WRJV participant. There are no other back-in rights or third-party royalties applicable to this property.

At the time of the 2018 PFS, there were no known environmental liabilities associated with the property with respect to current operations. In its financial statements, the Company has made estimates of the current value of certain reclamation obligations for work performed. Before work can be performed on the property, the appropriate exploration or other permits must be applied for and obtained. If Denison was unable to satisfy its obligations with respect to the regulatory and consultation process to obtain the necessary permits, the Company’s plans for exploration or other work on the property could be delayed or halted. See “Risk Factors” for more information on this and other potential risks that may affect access, title or the right or ability to perform work on the property. For surface exploration and evaluation activities that may occur in 2023, the Company has obtained or intends to apply for all necessary permits. Additional permits and licences may be required in connection with the Company’s project evaluation activities beyond 2023 and will be required prior to commencement of development and production activities (refer to section 20 of the Wheeler PFS Report).

History

The Wheeler River property was staked on July 6, 1977, due to its proximity to the Key Lake uranium discoveries, and on December 28, 1978, it was vended into an agreement between AGIP Canada Ltd., E&B Explorations Ltd. and Saskatchewan Mining Development Corporation, with each holding a one-third interest. On July 31, 1984, each party divested a 13.3% interest and allowed Denison Mines Limited, a predecessor company to Denison, to earn in to a 40% interest.

In late 2004, Denison entered into an agreement to earn a further 20% interest by expending $7,000,000 within six years. In connection with that, Denison became the project operator (2005 being the first full year of operatorship). In 2007, when the earn-in obligations were completed, the participating and ownership interests were Denison 60%; Cameco 30%, and JCU 10% and they remained that way up to the end of 2016.

In January 2017, Denison, Cameco and JCU executed an agreement, pursuant to which the WRJV Parties agreed to allow for a one-time election by Cameco to fund 50% of its ordinary share (30%) of joint venture expenses in 2017 and 2018. The shortfall in Cameco’s contribution was funded by Denison, in exchange for a transfer to Denison of a portion of Cameco's interest in the WRJV. Accordingly, Denison's share of joint venture expenses was 75% in 2017 and 2018, and Cameco and JCU's participating share of joint venture expenses was 15% and 10%, respectively. As a result of that agreement, Denison’s interest increased to approximately 66%, with Cameco holding approximately 24% and JCU holding 10%.

In September 2018, Denison and Cameco entered into an agreement, pursuant to which Denison would increase its ownership interest to 90% through the acquisition of 100% of Cameco’s minority interest in the WRJV (subject to certain rights of first refusal in favour of JCU under the WRJV joint venture agreement) in exchange for the issuance to Cameco of 24,615,000 Shares of Denison. JCU waived its rights under the WRJV joint venture agreement to acquire any of Cameco’s interest, and Denison’s acquisition of Cameco’s interest was completed effective October 26, 2018 (the “Cameco Transaction”). As a result, the WRJV was held by Denison (90%) and JCU (10%).

In August 2021, Denison completed the JCU Acquisition, acquiring a 50% ownership interest in JCU and therefore an additional 5% indirect interest in the WRJV.

Exploration and Development History to 2018 PFS

Geological Setting, Mineralization and Deposit Types

The Wheeler River property is located near the southeastern margin of the Athabasca Basin in the southwest part of the Churchill Structural Province of the Canadian Shield. The Athabasca Basin is a broad, closed, and elliptically shaped cratonic basin with an area of 425 km (east-west) by 225 km (north-south). The bedrock geology of the Athabasca basin area consists of Archean and Paleoproterozoic gneisses unconformably overlain by up to 1,500 m of flat-lying unmetamorphosed sandstones and conglomerates of the mid-Proterozoic Athabasca Group.

The Wheeler River property is located near the transition zone between two prominent litho-structural domains within the Precambrian basement, namely the Mudjatik Domain to the west and the Wollaston Domain to the east. The Mudjatik Domain is characterized by elliptical domes of Archean granitoid orthogenesis separated by keels of metavolcanic and metasedimentary rocks, whereas the Wollaston Domain is characterized by tight to isoclinal, northeasterly trending, doubly plunging folds developed in Paleoproterozoic metasedimentary rocks of the Wollaston Supergroup, which overlie Archean granitoid orthogenesis identical to those of the Mudjatik Domain. The area is cut by a major northeast-striking fault system of Hudsonian Age. The faults occur predominantly in the basement rocks but often extend up into the Athabasca Group due to several periods of post-depositional movement.

Local geology consists of relatively undeformed late Paleoproterozoic to Mesoproterozoic Athabasca Group strata, comprised of Manitou Falls Formation sandstones and conglomerates, which unconformably overlie the crystalline basement and have a considerable thickness from 170 m over the quartzite ridge to at least 560 m on the western side of the property. Basement rocks beneath the Phoenix and Gryphon deposits are part of the Wollaston Domain and are comprised of metasedimentary and granitoid gneisses. The metasedimentary rocks include graphitic and non-graphitic pelitic and semipelitic gneisses, meta-quartzite, and rare calc-silicate rocks. Pegmatitic segregations and intrusions are common in all units, with garnet, cordierite, and sillimanite occurring in the pelitic strata, indicating an upper amphibolite grade of metamorphism. Graphitic pelite and quartzite units appear to play important roles in the genesis of Athabasca Basin unconformity-associated deposits. Thus, the presence of extensive subcrop of both units (18 km of quartzite and 152 line-km of conductors, assumed to be graphitic pelite) greatly enhances the geological potential of the Wheeler River property. The Wheeler River property is partially covered by lakes and muskeg, which overlie a complex succession of glacial deposits up to 130 m in thickness. These include eskers and outwash sand plains, well-developed drumlins, till plains, and glaciofluvial plain deposits. The orientation of the drumlins reflects southwesterly ice flow.

The Phoenix uranium deposit was discovered in 2008 and can be classified as an unconformity-associated deposit of the sandstone-hosted or egress-style variety. The deposit occurs dominantly within sandstone immediately above the sub-Athabasca unconformity approximately 400 metres below surface and comprises three elongate pods of mineralization (Zone A, B, and C) which cover a strike length of 1.1 kilometres. Zone A, the largest of the three pods, is approximately 380 metres in length, up to 80 metres wide, up to 15 metres thick, and consists of an exceptionally high-grade core (62,900 tonnes at 43.2 % U₃O₈ for 59.9 million pounds U₃O₈ in estimated Indicated resources) surrounded by a lower grade shell. The deposit occurs along a prominent post-Athabasca basement thrust fault (WS Shear) which occurs footwall to a graphite-rich pelitic gneiss unit and hangingwall to a garnetiferous pelitic gneiss and quartzite unit. Mineralization within the Phoenix deposit is dominated by massive to semi-massive uraninite associated with an alteration assemblage comprising hematite, dravitic tourmaline, illite, and chlorite. Secondary uranium minerals (including uranophane) and sulphides are found in trace concentrations.

The Gryphon uranium deposit was discovered in 2014 and can be classified as an unconformity-associated deposit of the basement-hosted or ingress-style variety. The deposit occurs within southeasterly dipping crystalline basement rocks below the regional sub-Athabasca Basin unconformity. The deposit is located from 520 to 850 metres below surface, has an overall strike length of 610 metres and dip length of 390 metres, and varies in thickness between two and 70 metres, depending on the number of mineralized lenses present. The mineralized lenses are controlled by reverse fault structures, which are largely conformable to the basement stratigraphy and dominant foliation. The A, B, and C series of lenses are comprised of stacked, parallel lenses which plunge to the northeast along a fault zone (G-Fault) which occurs between hangingwall graphite-rich pelitic gneisses and a more competent pegmatite-dominated footwall. A ubiquitous zone of silicification (Quartz-Pegmatite Assemblage) straddles the G-Fault and the A, B, and C series of lenses occur in the hangingwall of, within, and in the footwall of the Quartz-Pegmatite Assemblage respectively. The D series lenses occur within the pegmatite-dominated footwall along a secondary fault zone (Basal Fault) or within extensional relay faults which link to the G-Fault. The E series lenses occur along the G-Fault, up-dip and along strike to the northeast of the A and B series lenses, within the upper basement or at the sub-Athabasca unconformity. Mineralization within the Gryphon deposit lenses is dominated by massive, semi-massive, or fracture-hosted uraninite associated with an alteration assemblage comprising hematite, dravitic tourmaline, illite, chlorite, and kaolinite. Secondary uranium minerals (including uranophane and carnotite) and sulphides are trace in quantity.

Exploration and Drilling

As operator, Denison has conducted numerous geophysical surveys across the property, generating many drill targets over several years. Airborne surveys have included two electromagnetic surveys (totaling 2,005 line kilometres) and one gravity survey (totaling 1,711 line kilometres). Ground surveys have included four electromagenetic surveys (488 line kilometres), 10 resistivity surveys (979 line kilometres), two gravity surveys (2,920 stations) and 45 downhole geophysical surveys. Results to date indicate the property comprises multiple prospective trends that warrant drill testing. These trends are interpreted primarily from magnetic and electromagnetic and/or resistivity data to infer the location of faulted graphitic basement horizons that may have the potential to host uranium mineralization.

Denison has completed 422,362 metres of exploration diamond drilling in 815 holes on the Wheeler River property during the period from 2005 to the end of 2022. The majority of this drilling has been focused on the discovery and delineation of, and installation of MWs and CSWs at, the Phoenix deposit (316 holes totaling 145,982 metres) and the discovery and delineation of the Gryphon deposit (221 holes totaling 130,099 metres).

Discovery and Delineation of the Phoenix Deposit

In the summer of 2008, as a direct result of the 2007 DC resistivity survey along the hanging wall of the quartzite ridge, two drill holes were located 600 metres apart along the same low resistivity trend. This drilling intersected a zone of characteristic sandstone alteration and uranium mineralization linked to unconformity-associated uranium deposits. All drill holes during the summer of 2008 intersected either uranium mineralization or very strong alteration close to mineralization.

Subsequent drilling programs conducted during 2009 and 2010 extended the mineralized zone for a strike length of greater than 900 metres. An initial mineral resource estimate was completed at the end of 2010. Aggressive drilling programs in 2011 and 2012 successfully added additional mineral resources. In 2013, drilling was completed at the Phoenix deposit, but a large portion of the 2013 Wheeler River drilling program was also allocated to exploration of several other target areas on the property. Some additional infill drilling was completed at the Phoenix deposit in early 2014. This work successfully extended high grade mineralization into some areas previously modeled as low grade. These results, combined with results from 2013, were the catalyst for the updated mineral resource estimate for the Phoenix deposit effective May 2014.

Discovery and Delineation of the Gryphon Deposit

In March 2014, drill hole WR-556 resulted in the discovery of the Gryphon deposit, intersecting uranium mineralization averaging 15.33% U₃O₈ over 4.0 metres, hosted in graphitic gneiss 200 metres below the sub-Athabasca unconformity. The Gryphon deposit occurs on the K-North trend, which exhibits numerous favourable exploration criteria including basement quartzite and graphitic gneisses, basement structures, reverse offsets of the unconformity, weak basement hosted mineralization near the unconformity, and anomalous sandstone geochemistry and alteration.

Historical holes ZK-04 and ZK-06 drilled in the late 1980s, along the K-North trend, targeted unconformity-related mineralization and intersected favourable sandstone structure and alteration as well as alteration and weak mineralization in the basement approximately 35 metres below the unconformity. Follow-up drilling campaigns attempted to locate unconformity mineralization up-dip of the weak basement mineralization. Gryphon deposit discovery drill hole WR-556 was the first to evaluate the down-dip projection of these intersections into the basement.

Since the discovery hole at Gryphon, subsequent drilling campaigns in 2014 and 2015 were completed, and an initial resource estimate was released in November 2015. Additional mineralization was discovered immediately northeast of Gryphon in 2016, which was subsequently named the “D Series Lenses”. Continued drilling during 2016 and 2017 was focused on expanding the mineral resources at Gryphon and increasing the level of confidence from an inferred to indicated category, and an updated mineral resource estimate for the Gryphon deposit was released in January 2018. Drilling was completed during 2018 (15,621 metres in 23 drill holes), successfully extending the Gryphon deposit to the northeast by approximately 200 metres; however, these results have yet to be included in a mineral resource estimate. The Gryphon deposit remains open in numerous areas and the 2018 results confirm potential to continue to expand the Gryphon mineral resource outside of the current extents of the deposit.

2019 Exploration Drilling Activities

Denison conducted winter and summer diamond drilling programs at Wheeler River during 2019, totaling 10,573 metres in 20 holes. The programs focused on testing regional exploration target areas (K West, Q South East, K South, O Zone), with the aim of identifying additional high-grade uranium deposits that could become satellite operations for the processing plant planned for the Phoenix ISR operation.

In 2019, weak, unconformity-hosted uranium mineralization was identified along the southern portion of the K West trend, approximately 2 kilometres southwest of the Gryphon deposit, highlighted by WR-756 intersecting 0.03% U₃O₈ over 1.5 metres, and 1.3% Cu and 0.13% Ni over 4.0 metres, and 0.18% Co over 6.0 metres, located immediately above the sub-Athabasca unconformity.

At K South, drill hole WR-749 intersected anomalous uranium in both the upper sandstone (average 1.29 parts per million (“ppm”) uranium from 15 to 130 metres) and the lower sandstone (average 1.03 ppm uranium from 360 to 435 metres). The lower sandstone was also marked by significant hydrothermal alteration including anomalous clay signatures up to 80 metres above the unconformity. The granite intersected at the unconformity, at 465 metres, indicates the drill hole overshot the optimal target. The highly anomalous sandstone signatures indicate compelling future targets remain to the southeast, and along strike, where graphitic basement rocks and associated structure are interpreted to occur (subcrop) at the unconformity.

While no uranium mineralization was encountered at Q South East or O Zone, drilling in each area identified indicative structure and alteration coincident with weakly anomalous uranium geochemistry. Drilling at Q South East, intersected structured and hydrothermally altered sandstone, unconformity offset of 16 metres and basement stratigraphy identical to the Phoenix deposit. Additional targets exist along strike, particularly to the northeast along the Quartzite Ridge's eastern edge, which is largely untested for 8.8 kilometres. Drill tests of DCIP resistivity targets at the O Zone confirmed the presence of a major post-Athabasca thrust fault with an unconformity offset of over 60 vertical metres and associated significant sandstone structure and hydrothermal alteration.

2020 Exploration Drilling Activities

During 2020, exploration drilling focused on the Phoenix deposit with the objective of upgrading the confidence of certain portions of the mineral resource that lie within the then planned ISR freeze “dome” containment from Inferred Mineral Resources so that they may be incorporated into a future FS. Priority target areas included the “A/B Gap” (between Zones A and B), Zone B, and Zone C.

Exploration at the A/B Gap was highlighted by drill hole WR-765D1 in Zone B – which intersected 0.36% U₃O₈ over 3.5 metres (from 401.3 to 404.8 metres; drilled at an azimuth of 332.3° and an inclination of -79.6°), approximately 15 metres east of WR-333 (which previously intersected 14.6% U₃O₈ over 6.0 metres).

The 2020 drilling program at Zone C was designed to test the continuity and extents of known mineralization: 11 drill holes were completed in 2020 for a total of 3,633 metres. Three of these drill holes at Zone C intersected uranium mineralization, successfully extending the mineralized zone's strike length by approximately 20 metres to the southwest and delineating a potential high-grade mineralized “core.”

Once drilling at Phoenix was completed, the focus of the 2020 drill program shifted towards continued evaluation of regional target areas. Drilling was completed at both K West and M Zone.

A total of 6 drill holes were completed at K West, highlighted by WR-741AD2, which discovered high-grade uranium mineralization straddling the unconformity contact, grading 2.14% U₃O₈ over 4.0 metres, including 7.66% U₃O₈ over 1.0 metre. In addition, assay samples from WR-741AD2 returned high-grade nickel, grading 4.29% over 6.5 metres. Additional low-grade unconformity-associated mineralization was intersected along the K West fault approximately 400 metres south of WR-741AD2, making this trend a priority exploration target area for 2021.

Regional exploration drilling was also completed at the M Zone target area, located approximately 5.5 kilometres east of Phoenix and lying roughly 700 metres from the McArthur River – Key Lake haul road. A total of 4 drill holes were completed as part of the 2020 exploration program, including hole WR-778, which intersected a wide reverse fault zone in the lower sandstone, highlighted by multiple basement wedges, intense hydrothermal alteration, and a broad interval of weak uranium mineralization grading 0.08% eU₃O₈ over 10.2 metres. Denison has interpreted the presence of basement wedges and an unconformity elevation offset of 25 metres to indicate that a large reverse fault controls the broad zone of weak mineralization.

2021 Exploration Drilling Activities

Exploration activities for 2021 consisted of 12 diamond drill holes for a total of 5,906 metres drilled between the K West, M Zone, and Phoenix Zone A target areas. The program’s primary objective was to evaluate the potential for unconformity-associated uranium mineralization along several prospective corridors on the Wheeler River project, with a specific focus on the K West and M Zone target areas. Additional exploration drilling was also completed at Phoenix Zone A to test the extents of high-grade mineralization that was discovered outside of the previously defined extent of the high-grade domain of Phoenix Zone A by drill holes that were completed to support the installation of MWs for the 2021 ISR Field Test.

Drilling to support the installation of MWs for the 2021 ISR Field Test discovered additional high-grade uranium mineralization outside of the previously defined extents of the high-grade ore domain at Phoenix Zone A, in holes GWR-045 and GWR-049. Denison’s exploration team initiated follow-up drilling in the vicinity of GWR-045 and GWR-049 once the 2021 ISR Field Test program was completed. Two drill holes were completed, WR-784 and WR-787, for a total of 874.3 m. The results were highlighted by WR-787, a vertical hole drilled to test the extents of the high-grade mineralization discovered in GWR-049 by targeting the unconformity approximately 6 metres north of the mineralized intersection of GWR-049. WR-787 encountered high-grade unconformity-associated mineralization grading 3.6% eU₃O₈ over 4.5 metres from 411.40 metres.

Eight drill holes were also completed at K West, with a focus on evaluating the extents of mineralization encountered in 2020 by drill hole WR-741AD2 (described above). While all eight holes drilled at K West encountered prospective structure and alteration, only three holes (WR-741AD3, WR-782, and WR-785) encountered uranium mineralization above a 0.05% eU₃O₈ cut-off grade.

Two drill holes were completed at M Zone as part of the 2021 exploration program, focused on testing the M Zone fault in the vicinity of 2020 drill hole WR-778. Drill hole WR-788A was drilled to test the down-dip projection of mineralization hosted within the reverse fault structure intersected in 2020 drill hole WR-778. WR-788A intersected the unconformity approximately 20 metres southeast of WR-778. While the hole successfully intersected the M Zone structure at depth, no significant elevated radioactivity was observed. WR-789 was drilled to test for unconformity-associated mineralization by targeting the unconformity subcrop of the M Zone fault between historical holes WR-212 and ZM-07. The hole intersected multiple localized brittle faults within the lowermost 14 m of the sandstone column, interpreted to represent the sandstone expression of brittle reactivation of the M Zone structure. Elevated radioactivity was observed at the unconformity contact, but no mineralization exceeding a 0.05% eU₃O₈ cut-off was identified.

2022 Exploration Drilling Activities

The 2022 Wheeler River exploration drilling program began in early September 2022 and was completed in mid-December 2022. A total of 10,758 metres were drilled in nineteen holes, focused on the M Zone and K West target areas.

Sixteen holes totaling 7,964 metres were completed at the M Zone, where previous drilling identified a broad zone of low-grade mineralization in WR-778 (0.086% U₃O₈ over 10.2 metres), associated with a reverse fault complex characterized by multiple basement wedges and intense hydrothermal alteration. Structural disruption along the M Zone fault has resulted in an unconformity offset of roughly 20 metres.

Unconformity-associated uranium mineralization was encountered in four of the holes completed in 2022. The best mineralized intercept of the 2022 program was drilled in WR-792, which intersected uranium mineralization grading 0.28% eU₃O₈ over 4.7 metres, including 1.36% eU₃O₈ over 0.5 metres, located approximately 17 metres above the Athabasca unconformity. In addition, basement-hosted mineralization was encountered in holes WR-791 and WR-796D1 approximately 30-60 metres below the unconformity, suggesting that the potential to identify a basement-hosted uranium deposit in the M Zone area may exist. Equivalent grades of the mineralized intersection are displayed in the table below, while a map of the M Zone target area is depicted in figure below.

(1) Lengths indicated represent the down-hole length of mineralized intersections.

(2) Radiometric equivalent U₃O₈ (‘eU₃O₈‘) derived from a calibrated gamma downhole probe.

(3) Mineralized interval is composited above a cut-off grade of 0.05% eU₃O₈.

(4) Mineralized interval is composited above a cut-off grade of 1.0% eU₃O₈.

With the completion of the 2022 program, Denison has now identified sporadic, low-grade mineralization over a strike length of approximately 650 metres. Assay results from 2022 drilling at M Zone are pending.

Drilling at K West was designed to both test for unconformity mineralization along strike of known mineralization associated with the K West fault and to assess the potential for basement-hosted mineralization associated with the K West fault, down-dip of known mineralization. Four holes were completed at K West in 2022 for a total of 2,794 metres.

Unconformity-associated uranium mineralization was encountered in two intervals, grading 0.06% eU₃O₈ over 0.2 metres, and 0.12% eU₃O₈ over 1.2 metres in hole WR-804, which was designed to test the unconformity subcrop of the K West fault. While indicative structure and associated hydrothermal alteration were identified in the remaining holes completed in 2022, no other significant mineralization was encountered at K West. Assay results from 2022 drilling at K West are pending. Equivalent grades of the mineralized intersections are displayed in the table below, while the figure below depicts the location of WR-804 relative to previously discovered mineralization at K West and Gryphon. Assay results from 2022 drilling at K West are pending.

(1) Lengths indicated represent the down-hole length of mineralized intersection.

(2) eU₃O₈ derived from a calibrated gamma downhole probe.

(3) Mineralized interval is composited above a cut-off grade of 0.05% eU₃O₈.

In addition to diamond drilling activities, a Stepwise Moving Loop Electromagnetic (“SWML EM”) survey was initiated at the N Zone target area in the fourth quarter of 2022. Four of six survey lines were completed prior to year-end, and the remaining lines were completed in January 2023.

Proposed 2023 Wheeler River Exploration Program

Exploration work is expected to continue in 2023, with a focus on evaluating prospective trends with the hope of identifying an ISR-amenable, high-grade unconformity-associated uranium deposit. A second priority will be identifying basement-hosted mineralization that could be brought into potential future development plans for Gryphon.

Evaluation Activities

Subsequent to the completion of the 2018 PFS, Denison’s Board of Directors and the WRJV approved the advancement of the proposed Phoenix ISR operation towards a development decision. Accordingly, project development and evaluation activities in 2019 and subsequent years have been focused on various work scopes necessary for the advancement of the EA and FS processes for Phoenix, including ISR field testing, metallurgical testing and other EA and FS preparations.

2019 Field Program

The 2019 field program was designed to assess the permeability of Phoenix, and to collect an extensive database of hydrogeological data to further evaluate the ISR mining conditions present at Phoenix. This data is of critical importance to the advancement of Phoenix as an ISR mining operation, as it is expected to support a detailed assessment of the ISR requirements related to permeability and be further incorporated into a detailed ISR mine plan as part of the completion of a future FS.

The Company successfully completed the planned ISR field work and safely concluded operations on site at Wheeler River during the fourth quarter of 2019. The field activities associated with the 2019 field program were completed over a period of approximately 23 weeks (starting in June and completed in late November) and required the support of approximately 40 Denison employees and contractor staff.

The objectives of the program were extensive, and the scope of the work completed on site during the program was considerable. The following represent the key components of field work completed as part of the 2019 field program:

The 2019 field program achieved each of the program’s planned objectives, and was highlighted by several key de-risking accomplishments, including the following:

2020 Field Program

A hydrogeologic model was developed for Phoenix based on actual field data collected from the 2019 field program. The modelling, produced by an independent consulting firm, demonstrated a hydrogeologic “Proof of Concept” for the application of ISR mining method at Phoenix, with respect to potential operational extraction and injection rates.

The ISR field work completed in 2020 was designed with the primary objective of building additional confidence in the results of the independent hydrogeologic “Proof of Concept” model.

The hydrogeological data collected as part of the 2020 field program is expected to build additional confidence in the Company’s understanding of the fluid pathways within Test Area 1 and Test Area 2 of the 2019 field program and to further validate the Company’s hydrogeologic model for Phoenix, which is ultimately expected to support the design and permitting of field tests in future years and support a future FS.

Key elements of the completed 2020 field program included:

Based on the positive results from the hydrogeologic model, the Company developed and commenced 17 additional pump and injection tests between Test Area 1 and Tests Area 2 at Phoenix Zone A. The data collected is expected to provide additional insight into individual well capacities and the overall hydrogeological network of the deposit areas.

Over 1,000 additional drill core samples were collected from historical holes, dried, and analyzed for permeability and porosity. Samples were selected to refine the Company’s understanding of the mineralized hydrogeologic horizons, including the low permeability basement rocks and the overlying sandstone.

Mineralized core samples were collected and shipped to a third party qualified laboratory for rock mechanics tests, including tensile strength and uniaxial compressive strength. The samples targeted various previously identified hydrogeologic units, including the Upper Clay Zone, Lower Clay Zone and High-Grade Friable Zone. Results from these tests will be utilized to better define the design of certain permeability enhancement techniques for subsequent field programs.

Groundwater samples were collected from eight different environmental MWs in the Phoenix deposit area. Sampling occurred at several horizons within each well, including the horizons above, below, and within the Phoenix ore body. Samples were submitted to the Saskatchewan Research Council (“SRC”) Geoanalytical laboratory for analysis, and results are expected to be utilized to support the design and permitting of additional field tests expected to be incorporated into a future FS.

Five additional MWs were installed in two clusters, located approximately 500 metres northeast of Phoenix and 750 metres southeast of Phoenix. The additional MWs will allow for the collection of groundwater flow information at locations further away from the Phoenix deposit than had been previously studied, providing additional data for the site groundwater model. This is intended to allow for long-term monitoring and the modelling of ground water impacts, which will be an important element of the effects assessments in an EIS.

2021 Field Program

The 2021 ISR Field Test represented the most significant engineering related activity for the project since field testing activities commenced in 2019 and was designed to further increase confidence and reduce risk in the application of the ISR mining method at Phoenix.

A test pattern consisting of five CSWs, including GWR-038 to GWR-042, and 10 additional small diameter MWs (together described as the “Test Pattern”), was successfully installed within the Phase 1 area of the Phoenix deposit during the summer months.

Three methods of permeability enhancement were successfully evaluated on the five CSWs, with post permeability enhancement testing resulting in observed improvement in hydraulic responses and inter-well connectivity within the Test Pattern.

Twenty single-well injection tests were completed on the Test Pattern to evaluate natural permeability and the efficacy of permeability enhancement methods deployed in the CSWs.

A full-scale well pattern injection and pumping test was conducted to determine hydraulic connectivity for the Test Pattern as a whole, and to evaluate potential production rates for the pattern. This test fundamentally achieved the 50 L/min flow rate assumed in the 2018 PFS for an operating well pattern.  Hydraulic control of the Test Pattern was confirmed by no significant hydrologic responses observed in any of the overlying or underlying MWs.

Following the full-scale injection and pumping test, an ion tracer test was completed using the CSWs in the Test Pattern. Breakthrough of the ion tracer, as observed by an increase in the total dissolved solids (“TDS”), occurred at the three extraction wells within times that were consistent with the independent “Proof of Concept” hydrogeological modelling conducted in 2020.

After completion of the ion tracer test, a "clean-up" remediation test was conducted to simulate the ability to remove injected fluid from the Test Pattern. Tracer concentrations measured during the eight-day clean-up simulation, as observed by field TDS measurements, declined to as low as 13% of the peak TDS value in GWR-038, 11% of the peak TDS value in GWR-041, and 4% of the peak TDS value in GWR-039.

The ability to maintain hydraulic control was established by sampling the three overlying MWs for TDS values before and after the ion tracer test.  No elevated values in TDS were observed during the test, thus confirming there was no migration of the tracer to overlying horizons.

Overall, the ISR field test program was highly successful and produced several notable results, including:

Following completion of the 2021 field test, detailed groundwater modelling and ISR simulations were conducted for Phase 1 of the Phoenix deposit. The results from these tests further support the “Proof of Concept” analysis completed for Denison in 2020 and support the assumptions made in the 2018 PFS.

2022 Field Program

Field programs conducted at Phoenix Phase 2 and Phase 3 from 2019 to 2021 assessed the permeability of the Phoenix deposit, a key indicator of its amenability to the application of the ISR mining method. As outlined above, the field programs included the installation of pump/injection wells, observation wells, and CSWs. Core leach tests, column leach tests and several downhole geophysical assessments were also completed. The 2022 ISR Field Program built on the information obtained through field testing, expanding the Company’s knowledge of the ISR characteristics of the Phoenix deposit. The 2022 ISR Field Program involved the following components:

The test wells were successfully installed in three discrete three-spot clusters located in planned mining Phases 1, 2 and 4 of the Phoenix deposit. Each three-spot test pattern was used to further evaluate the ISR mining conditions within additional areas / phases of the deposit that have not been previously evaluated. A total of 4,177 meters were drilled in 9 wells. These evaluations are expected to be incorporated into mine planning efforts as part of the ongoing FS for the Project.

Following the successful installation of the nine additional PQ wells, extensive hydrogeologic test work commenced. During the second quarter of 2022, well development and short-term injection testing was completed on the nine additional PQ wells, as well as the five CSWs installed in 2021 in order to facilitate further detailed test work.

The test work completed during 2022 further defined the hydrogeological units within the ore zone, as well as the sweep efficiency of the deposit areas evaluated. These tests are expected to provide a more complete understanding of the hydrogeological characteristics throughout Phase 1, 2 and 4 and has been used to support the design and execution of the FFT, discussed below.

During the second quarter of 2022, the Company completed detailed borehole geophysical testing, including hydrophysics, cross-hole seismic and standard geophysical surveys. The test work was successfully conducted within the three-spot test patterns and the five CSWs. The results of this test work are being evaluated to determine the vertical and horizontal flow profile of the deposit for incorporation into the mine planning associated with the ongoing FS.

2022 Feasibility Field Test

Early in 2022, regulatory permitting activities in support of the FFT were finalized, with the Company receiving approval from the SKMOE to construct and operate the Phoenix FFT in July 2022. In August 2022, the Company also received a Nuclear Substance and Radiation Device Licence from the CNSC, which allows it to possess, use, store and transfer a nuclear substance (uranium bearing solution) at the Phoenix FFT location.

The FFT was designed to use the existing commercial-scale ISR test pattern installed at Phoenix in 2021 in order to facilitate a combined evaluation of the Phoenix deposit's hydraulic flow properties, with the leaching characteristics that have been previously assessed through the metallurgical core-leach testing program. Overall, the FFT was intended to provide further verification of the permeability, leachability, and containment parameters needed for the successful application of the ISR mining method at Phoenix and the results are expected to validate and inform various FS design elements – including the production and remediation profiles expected for the Project.

The operation of the FFT was planned to occur in three phases: (1) the leaching phase, (2) the neutralization phase, and (3) the recovered solution management phase, with the leaching and neutralization phases expected to span an estimated 60-day operating time frame.

The leaching phase was designed to assess the effectiveness and efficiency of the leaching process in the mineralized zone, at a depth of approximately 400 metres below the surface. The leaching phase included the controlled injection of an acidic solution into a portion of the existing test pattern within the mineralized zone (the “Leaching Zone”) and the recovery of the solution back to the surface using existing test wells.

The neutralization phase includes the recovery of the remainder of the leached mineralized solution from the Leaching Zone and is intended to verify the efficiency and effectiveness of the process for returning the Leaching Zone to near baseline conditions. During this phase, a mild alkaline (basic) solution will be injected into the Leaching Zone to neutralize the area and reverse the residual effects of the acidic solution injected during the leaching phase.

The recovered solution management phase involves separating the solution recovered from both the leaching phase and the neutralization phase into (i) mineralized precipitates and (ii) a neutralized treated solution. The mineralized precipitate will be temporarily stored on surface in steel tanks and the neutralized treated solution will be re-injected into a designated subsurface area.

Construction of the FFT facilities (discussed below) was completed in Q3 2022 with the lixiviant injection modules installed and commissioned in September 2022, allowing for the initiation and completion of the leaching phase of the FFT in October 2022. Results of the leaching phase demonstrated that the uranium bearing solution recovered during the FFT achieved targeted rates and grades, indicating that the hydrogeological system at Phoenix was responding as expected with pH trends, flow characteristics, and uranium recovery meeting expectations. The leaching phase results are summarized below:

The neutralization phase commenced after completion of the leaching phase and included the initial recovery of additional leached mineralized solution and injected lixiviant from the Leaching Zone. Following this initial stage of neutralization, a mild alkaline (basic) solution was injected into the Leaching Zone to further neutralize the area and reverse the residual effects of remaining acidic solution injected during the leaching phase. Overall, the results of the neutralization phase achieved the key pH restoration parameter outlined in the applicable regulatory approvals for the FFT, and verified the efficiency and effectiveness of the process for returning the Leaching Zone to environmentally acceptable pH conditions. Regular monitoring of the FFT's environmental performance will continue into 2023.

The recovered solution from the FFT is being stored temporarily on surface in tanks in accordance with approved containment measures and will be further processed as part of the recovered solution management phase of the FFT.

The final phase of the FFT, which involves management of the recovered solution, is expected to commence in the spring of 2023.

Historical Mineral Processing and Metallurgical Testing (2014-2018)

In 2014, preliminary metallurgical test work was initiated to assess the basic metallurgical properties of the Phoenix deposit ores. In 2017 and 2018, advanced metallurgical testing was completed, to test mill performance at extremes of potential ore feed grades and impurity levels, as well as optimize processing parameters. Results of this testing are incorporated in the Wheeler PFS Report.

In summary, for both the Phoenix and Gryphon deposits, results of the testing indicate that ores are readily amenable to low-pH base leaching with high uranium extraction rates. Performance in terms of retention time, reagent usage and consumption are all consistent with current industry operating parameters. Test work results were positive, with results generally in line with capacities at existing plants and with yellowcake produced meeting all specifications from ASTM C967-13 “Standard Specifications for Uranium Ore Concentrate”.

In order to support the evaluation of a contemplated ISR operation for Phoenix, during the 2018 PFS process, Denison completed Leach Amenability Studies (Bottle Roll Tests) and column leach tests from 2016 to 2018. Testing included subjecting appropriate ore samples to various solution calibrations and monitoring progress of leaching over time. Results of these initial tests demonstrated Phoenix ore responded strongly to low-pH leach conditions with low impurities removal, extremely low reagent consumption levels and high uranium recovery.

Recent Mineral Processing and Metallurgical Testing (2019-2021)

In December 2019, Denison initiated the next phase of metallurgical laboratory testing designed to further evaluate ISR uranium recovery at Phoenix, which focused on utilizing mineralized drill core recovered through the installation of various test wells during the 2019 ISR field program. The metallurgical laboratory test program built upon the laboratory tests completed for the recovery of uranium as part of the 2018 PFS and was designed to further increase confidence and reduce risk associated with the application of the ISR mining method. The results are expected to facilitate detailed mine and process plant planning as part of a future FS and provide key inputs for the EA process. Significant components of the metallurgical laboratory test program include specialized core leach tests, column leach tests, bench-scale tests and metallurgical modelling.

Core leach tests involve the testing of intact mineralized core samples using specialized equipment to replicate the in-situ leaching conditions of the Phoenix deposit. In February 2020, the Company reported on the results from the initial core leach tests. After the initial test startup, uranium bearing solution recovered from the core sample returned uranium content in the range of 13.5 g/L to 39.8 g/L. The average uranium concentration returned over the last 20 days of testing was 29.8 g/L – which represents a uranium content that is approximately 200% higher than (or three times) the minimum level used for the ISR process plant design in the 2018 PFS of 10 g/L.

During 2021, five core leach samples were tested at SRC. Four cores representing the high-grade/low-clay characteristics of the majority of the mineralization in the Phase 1 mining area were tested with results showing steady-state and average uranium bearing solution (“UBS”) head grades significantly above the 10g/L level used in the 2018 PFS. Given this result, the Company decided to adapt its plans for the remaining metallurgical test work, including the bench-scale tests of the unit operations for the processing plant, to reflect an assumed UBS head-grade recovered from the wellfield of 15g/L.

In addition to the high-grade/low-clay characteristics of Phase 1, the Phoenix ISR operation is also expected to encounter comparatively isolated areas with lower uranium grades and high clay content. These areas may result in a limited number of zones of reduced permeability. In order to understand the ISR leach dynamics in these areas, test work was also initiated on a sample representing high-clay characteristics (above 25% clay). Results obtained from these tests confirm that high-clay content can impact the natural permeability of the ore body and lead to lower UBS head-grades. Importantly, these tests also confirmed that permeability enhancement techniques have the potential to normalize these areas and significantly improve UBS head-grade concentrations to levels that align with core leach tests carried out using samples with higher grades and lower clay content.

Reclamation tests were completed on two cores that had previously undergone leaching in order to inform the ore zone reclamation process. The tests used alkaline solutions that have been employed in other ISR operations, at varying concentrations, in order to identify the most efficient flushing parameters for the Phoenix deposit.

Additional core samples in the same grade ranges (~1% to 60% U₃O₈) were obtained from the 2019 ISR field program and preserved for metallurgical tests. These samples were crushed and packed into test columns at the test facility, in order to complete traditional column leach tests utilizing the same mining solutions as the Core Leach Tests.

The column leach test program was completed in the second quarter of 2021. The primary purpose of the column leach tests was to recover sufficient volumes of UBS to facilitate bench-scale tests of the unit operations outlined in the flowsheet for the Phoenix processing plant. Over 900 litres of UBS was produced from 64 Kilograms (“‘kg”) of Phoenix core samples. Combined results from the four column leach tests are highly positive, with calculated UBS head-grade from the four columns averaging 19g/L, which further supports the decision to increase the overall UBS head-grade assumption for Phoenix.

While not the primary purpose of the column leach tests, average reagent addition rates from the column leach tests have also provided useful information that is supportive of the values published in the 2018 PFS.

Some of the 900 litres of UBS generated during the column leach tests have been utilized for several batch tests intended to confirm the anticipated primary unit processes for the Phoenix operation, including: iron/radium precipitation, uranium precipitation and water treatment.

The iron and radium precipitation stage was tested with 20 different conditions using 2 litre UBS batches for each test to define optimal precipitation parameters. Using the optimized parameters defined during the iron and radium precipitation tests, four 5 litre batches of UBS were tested to confirm uranium precipitation parameters.

During the fourth quarter of 2021, the Company commenced processing a high volume of UBS (120 litres) using optimized test conditions in order to finalize the surface processing plant design with process flow sheet, mass balance and major process equipment selection.

Additionally, over 20 further metallurgical tests were completed to support the design and permitting of the FFT.

Concurrent with these tests, Denison was building a metallurgical simulation model with the basic parameters for mass, energy and water balances. The data from all laboratory tests will be incorporated into a model update once testing is completed.

The operating plan envisioned for the Phoenix deposit results in minimal “contaminants of concern” remaining on surface at mine closure. The process plant will be designed to remove essentially all contaminants of concern at the front end of the plant with precipitation of iron and radium as the first unit operation. Testing to date has indicated that to remove the majority of iron and radium contaminants would result in the capture of approximately 1% of the uranium in the precipitate and testing of this process and the recovery of such uranium was undertaken in 2020 and 2021.

The temperature of the Phoenix deposit at 400 m depth is estimated to be 5 to 10 degrees Celsius. Most uranium mills run their leach circuits at 20 to 50 degrees Celsius. Due to this significant temperature difference, core leach test work in 2020, 2021 and 2022 was undertaken at temperatures representative of the deposit, to investigate leaching kinetics for different lixiviant concentrations. Conclusions from completed tests indicate that acceptable leaching rates can be achieved for the specific characteristics and temperatures of the deposit.

2022 Mineral Processing and Metallurgical Testing

In 2022, the metallurgical test program continued at the SRC laboratories in order to further support feasibility study advancements. The majority of the test work to support the FS has been completed, including final analysis of the long-term core leach test. The results of the long-term core leach test were highlighted by: (a) overall recovery of uranium in excess of 97% – demonstrating excellent recovery of uranium from intact high-grade core without the use of permeability enhancement; (b) average recovered solution uranium head grade of 18.3 g/L – exceeding the assumed 15 g/L uranium head grade being used in FS plant designs; (c) continuous intact core leach testing over a period of 377 days, with uranium recovery head grades consistently maintained above 5 g/L during the final stages of the production curve and then declining during the ramp-down stage; and (d) maximum recovered solution uranium head grade of 49.8 g/L achieved using similar lixiviant concentrations as to those used during the FFT.

Effluent treatment technology test work involving a third-party vendor was completed, as was effluent treatment test work at SRC for supporting an options analysis for the feasibility study.

Metallurgical test work continues to further investigate in-situ leaching conditions, as well as column leach & remediation testing.

Feasibility Study Preparations

In September 2021, Denison announced the decision of the WRJV to advance the ISR mining operation proposed for Phoenix to the FS stage and the selection of Wood PLC, an independent and leading global consulting and engineering firm, to lead and author the FS in accordance with NI 43-101.

During 2022, FS efforts related to the development of the Phoenix ISR production model and the progression of the 3D process plant model continued. In addition, engineering progressed on major components of the proposed Phoenix ISR operation, advancing the estimating process for the FS during the fourth quarter of 2022.

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. Key objectives of the FS are expected to include:

Extensive planning and technical work undertaken as part of the ongoing EA, including applicable feedback from consultation efforts with various interested parties, is expected to be incorporated into the FS project designs to support our aspiration of achieving a superior standard of environmental stewardship that meets and exceeds the anticipated environmental expectations of regulators and aligns with the interests of local Indigenous communities.

Mineral resources for Phoenix were last estimated in 2018. Since then, additional drilling has been completed in and around the Phoenix deposit as part of various ISR field tests and exploration drilling. As part of the FS process, an updated mineral resource estimate will be prepared to include subsequent drilling since 2018 and form a basis for mine planning in the FS.

FS mine design is expected to reflect the decision to adopt a freeze wall configuration for containment of the planned ISR well field, instead of the freeze “dome” planned for in the 2018 PFS, as well as the results from multiple field test programs and extensive hydrogeological modelling exercises, which have provided various opportunities to optimize other elements of the project – including well pattern designs, permeability enhancement strategies, and both construction and production schedules.

FS process plant design is expected to reflect the decision to increase the ISR mining uranium head-grade to 15 g/L from the 10 g/L projected in the 2018 PFS, as well as the results from extensive metallurgical laboratory studies designed to optimize the mineral processing aspects of the project.

The FS is also intended to provide the level of engineering design necessary to support a Class 3 capital cost estimate (AACE international standard with an accuracy of -15% /+25%), which is expected to provide a basis to confirm the economic potential of the Wheeler River project highlighted in the 2018 PFS.

Sampling, Analysis and Data Verification

See “Athabasca Exploration: Sampling, Analysis and Data Verification” for details.

Mineral Reserve and Mineral Resource Estimates

RPA, an independent technical consulting firm (now SLR) with relevant experience, was retained by Denison on behalf of the WRJV to prepare and audit the mineral resource estimates for the Gryphon and Phoenix deposits in accordance with CIM Definition Standards (2014) and NI 43-101. The Wheeler PFS Report contains a combined mineral resource estimate for the Wheeler River project, with effective dates for the mineral resource estimates for the Gryphon and Phoenix deposits of January 30, 2018 and May 28, 2014, respectively. The mineral reserve estimate for Phoenix in the Wheeler PFS Report was prepared by another independent firm, based upon the 2014 mineral resource estimate. See “Mineral Reserves and Mineral Resources”, above, for a summary of the combined mineral resource estimate for the Wheeler River project.

Phoenix Deposit Mineral Resource Estimation Methodology

Geology, structure, and the size and shape of the mineralized zones have been interpreted using data from 243 diamond drill holes which resulted in three-dimensional wireframe models that represent 0.05% U₃O₈ grade envelopes. The mineralization model generally consists of a higher-grade zone within an envelope of lower-grade material, resulting in two main estimation domains – high-grade and low-grade. Additionally, a small zone of structurally controlled basement mineralization was modelled at the north end of the deposit.

Based on 196 dry bulk density determinations, Denison developed a formula relating bulk density to uranium grade which was used to assign a density value to each assay. Bulk density values were used to weight grades during the resource estimation process and to convert volume to tonnage.

Uranium grade times density (“GxD”) values and density (“D”) values were interpolated into blocks in each domain using an inverse distance squared (“ID2”) algorithm. Hard domain boundaries were employed such that drill hole grades from any given domain could not influence block grades in any other domain. Very high-grade composites were not capped but grades greater than a designated threshold level for each domain were subject to restricted search ellipse dimensions in order to reduce their influence. Block grade was derived from the interpolated GxD value divided by the interpolated D value for each block. Block tonnage was based on volume times the interpolated D value.

The mineral resources estimated for the Phoenix deposit were classified as indicated or inferred based on drill hole spacing and apparent continuity of mineralization. The block models were validated by comparison of domain wireframe volumes with block volumes, visual comparison of composite grades with block grades, comparison of block grades with composite grades used to interpolate grades, and comparison with estimation by a different method.

Gryphon Deposit Mineral Resource Estimation Methodology

The three-dimensional mineralized wireframes were created by Denison utilizing Gemcom software following detailed interpretation of the deposit geology and structure. The wireframes were defined using a threshold of 0.05% U₃O₈ and minimum thickness of two metres. One high grade domain was defined within the A1 lenses and three high grade domains were defined in the D1 lenses based on a threshold of 4.0% U₃O₈. The wireframes and drilling database were sent to RPA for grade modelling following QAQC which included ensuring the wireframes were ‘snapped’ to the drill hole mineralized intervals.

Based on 279 dry bulk density determinations, a polynomial formula was determined relating bulk density to uranium grade which was used to assign a density value to each assay. Bulk density values were used to weight grades during the resource estimation process and to convert volume to tonnage. Uranium GxD values and D values were interpolated into blocks measuring 5 metres by 1 metre by 2 metres using an ID2 algorithm since variograms were not considered good enough to derive kriging parameters. Hard domain boundaries were employed at the wireframe edges, so that blocks within a given wireframe were only informed by grade data from that wireframe. For the A1 high-grade domain, assays were capped at 30% U₃O₈ with a search restriction applied to composite grades over 20% and for the D1 high-grade domains, assays were capped at 20% U₃O₈ with no search restriction. For the A1-A4, B3-B7, C4-C5 and D2-D4 low-grade domains, assays were capped at 10% U₃O₈. For the C1 low-grade domain, assays were capped at 20% U₃O₈ with a search restriction applied to composite grades over 10%. For the B1, B2, E1 and E2 low-grade domains, assays were capped at 15% U₃O₈ with search restrictions applied to composite grades over 10% U₃O₈ for the B1 domain and 5.0% U₃O₈ for the E2 domain. For the D1 low-grade domain, assays were capped at 5% U₃O₈. Block grade was derived from the interpolated GxD value divided by the interpolated D value for each block. Block tonnage was based on volume times the interpolated D value.

The mineral resources estimated for the Gryphon deposit were classified according to the drill hole spacing and the apparent continuity of mineralization, as either indicated mineral resources (generally, drill hole spacing of 25 x 25 metres) or inferred mineral resources (generally, drill hole spacing of 50 x 50 metres). The block models were validated by comparison of domain wireframe volumes with block volumes, visual comparison of composite grades with block grades, comparison of block grades with composite grades used to interpolate grades, and comparison with estimation by a different method.

Phoenix and Gryphon Deposit Reserve Calculations

The mineral reserve for the Phoenix and Gryphon deposits are summarized in the following table. For Phoenix, the ISR process has been designed to a level appropriate for a pre-feasibility study and mineral reserve estimation, with application of appropriate modifying factors including geological, mining, hydrogeological, metallurgical and cut-off grades. The Gryphon underground mine design has been completed to a level appropriate for a pre-feasibility study and the mineral reserve estimation, with application of appropriate modifying factors including geological, mining recovery and dilution and cut-off grades. The estimated mineral reserves are based on previously estimated indicated mineral resources, which are converted to probable reserves.

Mineral Reserve Estimate – Wheeler River Project – September 1, 2018

Notes:

Mining Methods

Phoenix

ISR mining has become the industry’s leading low-cost uranium production method globally – following on from initial use in the 1960s to extensive use at present in Kazakhstan (the world's largest and lowest cost producer of uranium), the United States, China, Russia, and Australia, amongst others. ISR mining is amenable to uranium deposits in certain sedimentary formations and is well known in the industry for comparatively minimal surface impact, high production flexibility, and low operating and capital costs. In 1998, ISR mining represented roughly 13% of global uranium production, increasing rapidly to the point where it was estimated to account for over 50% of global uranium production as at the date of the 2018 PFS. There has been continuous development and improvement of ISR mining techniques in past years, particularly in the two decades since the International Atomic Energy Agency (“IAEA”) published the Manual of Acid In-Situ Leach Uranium Mining Technology (IAEA-TECDOC-1239).

ISR mining involves recovery of uranium by pumping a mining solution (also referred to as a “lixiviant”) through an appropriately permeable orebody. The method eliminates the need to physically remove ore and waste from the subsurface – thus eliminating the related surface disturbance and tailings normally related to underground or open pit operations. The mining solution dissolves the uranium as it travels through the ore zone – effectively reversing the natural process that originally deposited the uranium. The mining solution is injected into the ore zone through a series of cased drill holes called injection wells and pumped back to surface via a similar series of recovery wells. The collective of the various injection and recovery wells is referred to as a wellfield. Once on surface, the uranium bearing solution is sent to a surface processing plant for the chemical separation of the uranium. Following the uranium removal, the mining solution (often referred to at this stage as the barren mining solution) is reconditioned and returned back to the wellfield for further production.

ISR wellfields are designed to effectively target delineated mineralization and achieve the operation’s desired production level. The wellfield at Phoenix has been designed in the 2018 PFS using a standard hexagonal pattern with 10m spacing between wells.

Containment of the solution is a requirement in ISR operations to ensure recovery of the uranium and to minimize regional groundwater infiltration into the ore zone and associated dilution of the mining solution. In typical ISR operations, this is normally achieved through aquitards, such as natural clay or other impermeable geological layers.

At Phoenix, the basement rock below the orebody achieves this purpose but the sandstone formation which hosts and surrounds the ore zone is not impermeable. As a result, the 2018 PFS designs proposed that the entire orebody will be isolated by use of an artificial freeze wall “dome” (see below for more information) extending upwards from the basement rock below the orebody. Ground freezing involves the installation of a series of drill holes that are cased to allow for the circulation of a low temperature brine solution, which removes heat from the ground and effectively freezes the natural groundwater in the area of the deposit, thus establishing an impermeable frozen wall surrounding (or in the case of the “dome”, encapsulating) the deposit.

Benefits of ISR operations generally include:

The Company's evaluation of the ISR mining method at Phoenix, as detailed in the Wheeler PFS Report, has identified several significant environmental and permitting advantages, particularly when compared to the impacts associated with conventional uranium mining in Canada. The 2018 PFS’s plan for the proposed ISR mining operation is expected to produce no tailings, generate very small volumes of waste rock, and has the potential for low volumes or possibly no treated water discharge to surface water bodies, as well as the potential to use the existing power grid to operate on a near zero carbon emissions basis.

The planned use of ground freezing to isolate the ISR operation, has the potential to streamline the mining process, minimize interaction with the environment, and facilitate controlled reclamation of the site at decommissioning.

Taken together, ISR mining at Phoenix has the potential to be one of the most environmentally friendly uranium mining and processing operations in the world.

2020 Phoenix Freeze Wall Design Change

In December 2020, Denison announced the results of a trade-off study, completed approximately 2-years following the completion of the 2018 PFS, assessing the merit of adopting a vertical freeze wall design as part of the ISR mining approach planned for Phoenix. Based on the results of the trade-off study, a vertical freeze wall design has the potential to offer significant environmental, operational, and financial advantages compared to the freeze wall “dome” (or “cap”) design previously planned for the project and included in the 2018 PFS.

Accordingly, the Company has decided to adapt its plans for the project to use a vertical freeze wall in future Project design and environmental assessment efforts. The trade-off study highlights the potentially significant benefits anticipated from a vertical freeze wall design:

The freeze wall design provides full hydraulic containment of the ISR wellfield by establishing a physical perimeter around the mining area, which will extend from the basement rock underlying Phoenix to surface – enhancing environmental protection in the area of the ISR mining operation, thereby minimizing potential environmental impacts during the life of the operation, while still establishing a defined area for decommissioning and reclamation;

A freeze wall is expected to be installed using existing and proven vertical or angled diamond drilling methods, rather than the directional / horizontal drilling approach proposed in the 2018 PFS to establish a freeze cap. The use of conventional diamond drilling methods is expected to substantially decrease the technical complexity associated with project construction. Similarly, the adaptation of previous plans (described in the Wheeler PFS Report) to remove the cap design is expected to significantly reduce operational risks by eliminating the potential intersection of freeze holes during the installation of future ISR wells as the ISR wells will no longer have to pierce a freeze cap to access the mining horizon;

The 2018 PFS freeze cap design contemplated the use of a small number of large horizontal freeze holes to encapsulate the entire Phoenix deposit at depth prior to first production. In contrast, the freeze wall design, which consists of vertical / angled freeze holes, provides the flexibility for a phased mining approach that requires a relatively limited initial freeze wall installation to commence mining, with additional ground freezing occurring throughout the life of the mine in sequential phases. This is likely to reduce the project’s upfront capital requirements and initial ground freezing time.

The predominant drilling method used in the freeze wall design is conventional diamond drilling. This existing and proven method is widely employed and established in northern Saskatchewan. Accordingly, it is anticipated that Denison will be able to leverage the existing skilled work force in the region to increase business and employment opportunities for residents of Saskatchewan’s north.

The trade-off study provides for mining to occur over 5 phases, as outlined in the tables below. This approach is expected to match the overall mine production schedule of the 2018 PFS.

*Note: These amounts are estimates and projections only and do not include Phoenix Zone B2 reserves of 133,000 lbs U₃O₈, representing 0.2% of the total reserves for Phoenix outlined in the Wheeler PFS Report. This expected change is driven by the estimated costs and other assumptions set forth in the Wheeler PFS Report plus the estimated incremental cost of an expansion of the freeze wall, rendering mining in this area uneconomic. The aggregate reserves, and many of the assumptions and qualifications related thereto, as well as the mine plan associated with the declared reserves are set forth in the Wheeler PFS Report.

The currently forecasted freeze wall construction requirements for Phase 1 include 57 vertical freeze holes with 24,500 metres of diamond drilling. For comparison, the 2018 PFS model for the freeze cap included 30 horizontal freeze holes installed during construction for an overall drilling meterage of 32,700 m, using more expensive horizontal drilling methods. With the freeze wall design, subsequent mining phase areas would be established prior to completion of mining in the previous phase area to provide uninterrupted mine production.

The freeze wall phased approach is anticipated to minimize initial capital and construction timeline requirements for the Project by spreading out the freeze wall construction over the life of mine. Only the Phase 1 freeze wall is required during initial construction to achieve first production. A reduced initial freeze wall also has a reduced initial freeze plant capacity requirement. As the freeze plant is modular in design, the freezing capacity can also be deferred over the life of mine. The projected lower initial capital requirements associated with the phased freeze wall approach are expected to have positive impacts on the economics of the Project.

Proposed Phoenix Wellfield and Freeze Wall Containment Configuration

Gryphon

The extraction strategy for Gryphon, as described in the Wheeler PFS Report, has not changed from the approach described in the Company’s preliminary economic assessment released in March 2016. The planned mining method for Gryphon is conventional longhole stoping with backfill. Longhole stoping is a widely used conventional mining method applied in both the Canadian uranium industry as well as in the broader mining industry for the extraction of base metals, gold, and other commodities.

According to the planned approach, access to the Gryphon deposit will be established through two shafts. The primary shaft will provide for movement of personnel and supplies, ore/waste hoisting, and fresh air to the underground operations. The second shaft will be solely for exhaust air and secondary egress. Both shafts will be excavated through blind boring methods. Blind bored shafts have been selected for vertical access in favour of typical full-face shaft sinking with cover grouting or freeze curtain protection. Blind bored shafts offer more competitive costs and construction schedules, and a reduced risk profile while sinking through saturated ground conditions. A composite steel/concrete liner will be installed over the full length of the shaft and grouted into basement rock.

In the underground operation, initial underground development will focus on the establishment of permanent infrastructure and flow through ventilation between the main shaft and the exhaust shaft. Most of the permanent infrastructure will be located on the 500 m level, the level of the main shaft station. Following this, development priorities will be to establish access to the E series lense (E Zone), which provides an early opportunity for ore production and waste rock storage (in mined-out stopes). As mining is initiated in the E Zone, ramp development will continue to provide access to the remainder of the ore zones.

The 2018 PFS also assumes that the ore will be hoisted to surface and transported to the McClean Lake mill for processing. A two-year ramp-up to full production is planned, with the full production rate set at 9 million pounds U₃O₈ per year. Processing at the McClean Lake mill will require the negotiation and execution of a toll milling agreement, which is not currently established, and will also require regulatory approvals, which have not been obtained.

Processing and Recovery

Phoenix

The uranium bearing solution from the Phoenix wellfield will be directed to a self-contained processing facility located adjacent to the wellfield. As per the 2018 PFS, the processing plant is expected to house most of the process equipment in a 46,500 square foot pre-fabricated metal building.

The proposed processing plant for the Phoenix ISR process in the 2018 PFS has four major circuits: impurities removal, yellowcake precipitation, dewatering/drying, and packaging. The processing plant will also have filtration systems, bulk chemical storage, process solution storage tanks, and a control room.

Denison is currently conducting additional leaching tests at the SRC laboratories. The results from these tests are expected to form the basis for the Processing Plant designs planned to be incorporated into the FS. Testing is expected to include all unit operations currently included in the flow-sheet from the 2018 PFS, as summarized in the figure below.

Phoenix ISR Processing Plant Design

Broadly, the 2018 PFS ISR processing plant design for Phoenix involves the beneficiation of the uranium bearing solution recovered from the wellfields and pumped to the processing plant, as described below:

Taken together, the processing plant is expected to achieve 98.5% recovery of uranium from the uranium bearing solution. The simplified processing plant design, together with the use of the freeze wall containment, creates a potentially closed loop system with the prospect of achieving zero discharge of effluent to the environment. The different types of chemical reagents will be stored, used, and managed to ensure worker and environmental safety, in accordance with standards developed by regulatory agencies and vendors.

Gryphon

The 2018 PFS plan assumes that Gryphon ore will be transported to the McClean Lake mill for processing.

The results of the metallurgical test work program completed for the 2018 PFS indicate that the Gryphon deposit is amenable to recovery utilizing the existing McClean Lake mill flowsheet. Moreover, the deposit is amenable to processing under similar conditions to those currently used in the McClean Lake mill. The mill is currently processing material from the Cigar Lake mine; however, it has additional licenced processing capacity to a total annual production of up to 24 million pounds U₃O₈. Overall process recovery based on metallurgical test work conducted to date has been estimated at 98.4% for Gryphon ore, with uranium recoveries of 98.2% applied in the financial modelling for Gryphon.

Should Denison proceed with processing the Gryphon deposit at the McClean Lake mill, such processing will require certain modifications to the McClean Lake mill. These modifications include expansion of the leaching circuit, the addition of a filtration system to complement the Counter Current Decantation (CCD) circuit capacity, the installation of an additional tailings thickener, and expansion of the acid plant. Various other upgrades will also be required throughout the mill to permit production at the full 24 million pounds per year U₃O₈ licenced capacity, as described in greater detail in the Wheeler PFS Report.

Infrastructure, Permitting and Compliance Activities

As a remote northern greenfield site, the Wheeler River project would require substantial infrastructure to support operations. The site is located approximately 5 kilometres from a provincial highway and powerline. Tie-ins from that infrastructure into site would be required.

Additional surface infrastructure required to be located at the sites would include:

In accordance with the plan, production from the Gryphon site will be trucked to the existing McClean Lake mill to the northeast, via existing Provincial Highway 914, including 51 km of new road required between the McArthur River mine and the Cigar Lake mine.

Phoenix Site Conceptual Layout

The figure above reflects the 2018 PFS’ conceptual plan for the Phoenix operation’s surface facilities, showing the relative scale and nominal footprint of site infrastructure, including (all estimated sizes are approximate):

Work completed subsequent to the 2018 PFS has identified potential adjustments to the surface layout of the conceptual plan, which are intended to be reflected in the FS.

Taken together, the Phoenix operation has the potential to be one of the most environmentally friendly uranium mining projects in the world. Per the plan in the 2018 PFS:

At Gryphon, the most significant environmental concern associated with the project will be the management of treated mine effluent. Investigations into environmentally acceptable discharge locations has identified suitable sites nearby that will minimize any impacts from treated effluent discharge. Other waste products, such as potentially acid generating waste rock or low-grade waste products, will be used underground as backfill on a priority basis where possible. Otherwise, such materials will be stored in approved facilities designed for safe closure and decommissioning. Future studies will evaluate the potential for 100% underground storage to eliminate the need for surface facilities.

Denison believes all potential environmental impacts associated with the planned Phoenix or Gryphon operations can be successfully mitigated through the implementation of industry best practices.

After careful consideration of the business risks and opportunities associated with concurrent advancement of project engineering activities, the state of the uranium market, and the differing economics of the proposed Phoenix and Gryphon operations outlined in the 2018 PFS, it was determined that only the Phoenix deposit should be advanced to the next level of technical de-risking and permitting. Accordingly, a Provincial Technical Proposal and Federal Project Description were submitted by Denison for the ISR uranium mine and processing plant proposed for Phoenix at the Wheeler River project in 2019 to initiate the Federal and Provincial environmental impact assessment process. The project is subject to both the Canadian Environmental Assessment Act, 2012 and the Saskatchewan Environmental Assessment Act.

In October 2022, Denison announced a significant regulatory milestone for Wheeler River with the submission of the draft EIS to the CNSC and SKMOE. The EIS submission outlines the Company’s assessment of the potential effects, including applicable mitigation measures, of the proposed ISR uranium mine and processing plant planned for Wheeler River, and reflects several years of baseline environmental data collection, technical assessments, plus extensive engagement and consultation with Indigenous and non-Indigenous interested parties.

See “Government Regulation – Environmental Assessments” for more information.

Denison recognizes the importance of early engagement and has been developing relationships with key interested parties since 2016. Amongst Denison’s guiding principles is the utmost respect for Indigenous communities, Indigenous Rights, and traditional knowledge. Denison wishes to share the land and to work in partnership to return meaningful benefits from the Wheeler River project to potentially impacted Rights holders, communities, and/or groups.

Denison understands the importance of protecting the area in which it is working, including the land, the water, the animals, the air and the history. Denison welcomes input from all interested parties through the regulatory engagement and consultation process and interested parties are invited to contact Denison directly to express any comments (positive or negative) or recommendations regarding its activities so the input can be incorporated into project plans, designs, and decisions.

Denison’s principles and objectives are expressed in its Indigenous Peoples Policy, which was designed to reflect Denison'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.

To support its engagement and consultation activities for the Wheeler River project, Denison has developed practices to (1) ensure that employment opportunities are established for residents from the communities of interest; (2) procure goods and services from suppliers from the communities of interest and/or Indigenous-owned suppliers, to support continued exploration and evaluation activities; (3) support important community-led activities related to wellness and/or the preservation of traditional knowledge; and (4) solicit input through engagement and consultation activities into aspects of project designs (for example, selection of mining methods, access road routing, and selection of preferred treated water discharge locations).

Capital and Operating Costs

Capital and operating cost estimates were developed to support the 2018 PFS plans for the development of the Gryphon and Phoenix deposits. The estimates address the initial capital, sustaining capital and operating costs required to engineer, procure, construct, commission, and operate the mines, ISR precipitation plant and related infrastructure at the Wheeler River site, and upgrades at the McClean Lake mill based on project plans outlined in the Wheeler PFS Report.

Estimates were completed to ‘Association for the Advancement of Cost Engineering’ class four level with an accuracy of -15% to -30% on the low side and +20% to +50% on the high side.

The Wheeler River project total capital cost is estimated at approximately $1.13 billion, including $322.5 million of initial pre-production capital for the Phoenix operation and $623.1 million of initial pre-production capital for the Gryphon operation as outlined in the following table.

Capital Cost Summary

The capital costs for the ISR mining of the Phoenix deposit are categorized as follows:

Phoenix Capital Cost Summary

The capital costs for the underground mining of the Gryphon deposit are shown in the following table.

Gryphon Capital Cost Summary

Operating costs are estimated for the 14-year mine production period. Phoenix mine production is scheduled over 10 years and Gryphon mine production is scheduled over 6.5 years. The table below presents a summary of the Wheeler River prefeasibility level operating cost estimates.

Wheeler River Operating Cost Summary

The 2018 PFS includes an analysis of project economics on a pre-tax basis (100% basis) and a Denison specific post-tax basis (including a 90% ownership basis, reflecting Denison’s then pro-forma ownership interest in Wheeler River). Inputs into both pre-tax and post-tax models include:

The Wheeler River project pre-tax indicative economic results of the 2018 PFS are illustrated below.

Pre-tax Economic Results (100% basis)

A post-tax Denison-specific economic assessment includes similar inputs as the pre-tax assessment with the following modifications:

The Wheeler River project post-tax Denison-specific (90% basis) indicative economic results are further detailed in the Wheeler PFS Report, and summarized as follows:

Post-tax Economic Results to Denison (90% basis)

Waterbury Lake

The Waterbury Lake Uranium Limited Partnership (“WLULP”) is held by Denison (67.40%) and Korea Waterbury Uranium Limited Partnership (“KWULP”) (32.58%) as limited partners and Waterbury Lake Uranium Corporation (“WLUC”) (0.02%), as general partner. Denison holds a 60% interest in WLUC (KWULP, 40%) and, in aggregate, holds a 67.41% interest in the WLULP through its limited partner and general partner ownership interests (KWULP, 32.59%). Denison is operator of the project.

This project description is based on the project’s technical report entitled “Preliminary Economic Assessment for the Tthe Heldeth Túé (J Zone) Deposit, Waterbury Lake Property, Northern Saskatchewan, Canada” effective October 30, 2020 (the “Waterbury PEA”). A copy of the Waterbury PEA is available on the Company’s website.

The conclusions, projections and estimates included in this description are subject to the qualifications, assumptions and exclusions set out in the Waterbury PEA. We recommend you read the technical report in its entirety to fully understand the project.

Property Description, Location and Access

The Waterbury Lake property is located within the eastern part of the Athabasca Basin in Northern Saskatchewan, which is within Treaty 10, in Nuhenéné / Athabasca Denesųłiné territory, and within the Métis Homeland.

The Waterbury Lake project, as of December 31, 2022, is comprised of thirteen (13) mineral dispositions, covering 40,256 ha and contains two deposits: the THT deposit and Huskie deposit.

The THT and Huskie deposits are located within the property near its eastern edge. All dispositions have sufficient approved assessment credits to maintain the ground in good standing until at least 2033.

The project dispositions are approximately 750 km by air north of Saskatoon and about 420 km by road north of the town of La Ronge. Points North Landing, a privately-owned service centre with accommodations and an airfield, is located near the eastern edge of the property. Several uranium deposits are located nearby including the Roughrider, McClean Lake, Midwest Main, and Midwest A deposits.

Any uranium produced from the Waterbury Lake property is subject to uranium mining royalties in Saskatchewan in accordance with Part III of The Crown Mineral Royalty Regulations. See “Government Regulation – Canadian Royalties”. Denison has a 2% net smelter return royalty on the portion of the project that it does not own. There are no other contractual royalties on the property.

There are no known environmental liabilities associated with the Waterbury Lake property, and there are no other significant factors and risks that may affect access, title, or the right or ability to perform work on the property.

Location of the THT (formerly J Zone) and Huskie Deposits on the Waterbury Lake project

History

Uranium exploration activities have been conducted over various portions of the Waterbury Lake mineral claims over the past 50 years. The current Waterbury Lake mineral claims were originally staked by Strathmore Minerals Corp. in 2004. Strathmore subsequently spun out its Canadian assets to Fission in 2007. On January 30, 2008, KWULP and Fission entered into an earn-in agreement for the Waterbury Lake property, pursuant to which Fission granted KWULP the exclusive rights to earn up to a 50% interest in the Waterbury Lake property by funding $14,000,000 of expenditures on or before January 30, 2011. Additionally, Fission retained an overriding royalty interest in the property of 2% of net smelter returns. On April 29, 2010, KWULP had fully funded its $14 million of expenditures and consequently earned a 50% interest in the property. Fission and KWULP subsequently formed the WLULP in December 2010 with each party owning an equal interest. In April 2011, Fission exercised a back-in option right and increased its interest in the WLULP to 60%.

Effective April 26, 2013, Denison acquired Fission and all of Fission’s rights and entitlements to the Waterbury Lake property, including the 2% net smelter returns royalty. Denison became manager of WLULP and operator of Waterbury Lake. KWULP has not funded spending programs of the WLULP since January 2014 and, as a result, Denison has increased its interest in the WLULP (now 66.90%) while KWULP has diluted.

The THT uranium deposit was discovered during the winter 2010 drill program. The second drill hole of the campaign, WAT10-063A, was an angled hole drilled from a peninsula extending into McMahon Lake. It intersected 10.5 metres of uranium mineralization grading 1.91% U₃O₈, including 1.0 metre grading 13.87% U₃O₈ as well as an additional four meters grading at 0.16% U₃O₈. Subsequent drilling led Fission to focus on a significant mineralized trend immediately adjacent to the southeastern boundary of disposition S-107370. The maiden mineral resource estimate for THT was issued by Fission in 2011.

Denison first discovered mineralization for the Huskie deposit in summer 2017 drill hole WAT17-466A, which intersected 9.10% U₃O₈ over 3.7 metres, including 16.78% U₃O₈ over 2 metres, from 306.5 to 310.2 metres depth. Further drilling in 2017 and 2018 resulted in a maiden mineral resource estimate in December 2018.

Geological Setting, Mineralization and Deposit Types

The Waterbury Lake property is located near the southeastern margin of the Athabasca Basin in the southwest part of the Churchill Structural Province of the Canadian Shield. The Athabasca Basin is a broad, closed, and elliptically shaped, cratonic basin with an area of 425 km east-west by 225 km north-south. The bedrock geology of the area consists of Archean and Paleoproterozoic gneisses unconformably overlain by flat-lying, unmetamorphosed sandstones and conglomerates of the mid-Proterozoic Athabasca Group.

The Waterbury Lake property is located near the transition zone between two prominent litho-structural domains within the Precambrian basement, the Mudjatik Domain to the west and the Wollaston Domain to the east. The Mudjatik Domain is characterized by elliptical domes of Archean granitoid orthogenesis separated by keels of metavolcanic and metasedimentary rocks, whereas the Wollaston Domain is characterized by tight to isoclinal, northeasterly trending, doubly plunging folds developed in Paleoproterozoic metasedimentary rocks of the Wollaston Supergroup, which overlie Archean granitoid orthogenesis identical to those of the Mudjatik Domain. The area is cut by a major northeast-striking fault system of Hudsonian Age. The faults occur predominantly in the basement rocks but often extend up into the Athabasca Group due to several periods of post-depositional movement.

The basement geology beneath the Waterbury Lake project is comprised of approximately northeast-trending corridors of metasediments wrapping around orthogneissic domes. Locally, within the Discovery Bay trend, an east-west trending corridor of metasediments bounded to the north and south by thick zones of orthogneiss that, based on interpretation of aeromagnetic images, may represent two large dome structures. The metasediments and the orthogneiss domes are interpreted to be Paleoproterozoic and Archean in age, respectively.

The THT deposit is hosted within an east-west trending faulted package of variably graphitic and pyritic metasediments bounded by orthogneiss to both the north and south. The metasedimentary assemblage, which ranges in thickness from 90 to 120 metres and is moderately steep dipping to the north consists of, from north to south, a roughly 50 metre thick pelitic gneiss underlain by a 20 metre thick graphitic pelitic gneiss, underlain by a 10 to 15 metre thick quartz-feldspar wedge, followed by a 20 metre thick graphitic pelitic gneiss, underlain by a 15 to 25 metre thick pelitic gneiss, then back into a footwall orthogneiss. There are discontinuous offsets at the unconformity that range from a few metres to as much as ten metres.

THT is currently defined by 268 drill holes intersecting uranium mineralization over a combined east-west strike length of up to 700 metres and a maximum north-south lateral width of 70 metres. The deposit trends roughly east-west (80°) in line with the metasedimentary corridor and cataclastic graphitic fault zone. A 45 metre east-west intermittently mineralized zone occurs in the target area formerly known as Highland, separating the THT deposit into two segments referred to as the eastern and western lenses which are defined over strike lengths of 260 and 318 metres, respectively. A thin zone of unconformity uranium mineralization lies to the north of the intermittently mineralized zone interpreted to represent a mineralized block that has been faulted and displaced northwards, referred to as the mid lens.

Mineralization thickness varies widely throughout the THT deposit and can range from tens of centimetres to over 19.5 metres in vertical thickness. In cross-section, THT mineralization is roughly trough-shaped with a relatively thick central zone that corresponds with the interpreted location of the cataclasite and rapidly tapers out to the north and south. Locally, a particularly high-grade (upwards of 40% U₃O₈) but often thin lens of mineralization is present along the southern boundary of the metasedimentary corridor, as seen in holes WAT10-066, WAT10-071, WAT10-091, and WAT10-103. Ten-metre step-out drill holes to the south from these high-grade holes have failed to intersect any mineralization, demonstrating the tight nature of mineralization.

Uranium mineralization at the THT deposit is generally found within several metres of the unconformity, at depths ranging from 195 to 230m below surface. Mineralization occurs in three distinct settings: (1) entirely hosted within the Athabasca sediments, (2) entirely within the metasedimentary gneisses or (3) straddling the boundary between them. A semi-continuous, thin zone of uranium mineralization has been intersected in occasional southern THT drill holes well below the main mineralized zone, separated by several meters of barren metasedimentary gneiss. This mineralized zone is informally termed the South-Side Lens and can host grades up to 3.70% U₃O₈, as seen in drill hole WAT11-142.

The Huskie deposit is entirely hosted within competent basement rocks below the sub-Athabasca unconformity primarily within a faulted, graphite-bearing pelitic gneiss (“graphitic gneiss”) which forms part of an east-west striking, northerly dipping package of metasedimentary rocks flanked to the north and south by granitic gneisses. The Athabasca Group sandstones that unconformably overlie the basement rocks are approximately 200 metres thick.

The deposit comprises three stacked, parallel lenses (Huskie 1, Huskie 2 and Huskie 3), which are conformable to the dominant foliation and fault planes within the east-west striking graphitic gneiss unit. The drilling to date suggests the grade, thickness, and number of lenses present is controlled by the presence of northeast striking faults that cross-cut the graphitic gneiss. The northeast striking faults identified at the Huskie deposit are interpreted to be part of the regional Midwest structure. The deposit occurs over a strike length of approximately 210 metres, dip length of approximately 215 metres and has a true thickness of approximately 30 metres (individual lenses vary in true thickness, typically from 1 metre to 7 metres). The deposit occurs at vertical depths ranging between 240 and 445 metres below surface and 40 to 245 metres below the sub-Athabasca unconformity. The high-grade mineralization within the lenses consists of massive to semi-massive uraninite (pitchblende) and bright yellow secondary uranium minerals occurring along fault or fracture planes, or as replacement along foliation planes. Lower grade mineralization is disseminated within highly altered rocks proximal to fault planes. The mineralization is intimately associated with hematite, which both occur central to a broad and pervasive alteration envelope of white clays, chlorite and silicification.

Exploration

With the exception of drilling and related work, exploration on the Waterbury Lake property has mostly been in the form of geophysical surveys. Airborne magnetic surveys have been flown property-wide and have been used to identify significant basement structures and to help map basement rock types. Airborne and ground-based EM surveys have also been carried out across the property to define conductive, likely graphitic basement structures that may be associated with uranium mineralization. Additionally, ground-based induced polarization (DC-IP) and gravity surveys have aimed to identify zones of low resistivity and negative gravity anomalies resulting from quartz dissolution and clay alteration.

A 16 line, 28.8 kilometre DCIP resistivity survey was completed during October 2018. The survey was designed to map the possible extension of the Midwest structure onto the Waterbury Lake property and to define possible drill targets for future testing.

The 2020 geophysical program consisted of 17.6 line kilometres of TEM surveying was completed on the WAT20-G1 grid. This survey defined a weak south-dipping conductor: Conductor ‘C’. The eastern extent of this conductor has poor amplitude and is interpreted to extend deeply into the basement. This interpretation aligns well with the results of drill hole WAT19-493, which was drilled, in 2019, in the GB Northeast area.

A small moving loop electromagnetic (“SML EM”) survey was initiated in the winter of 2022 to resolve conductive lithologies associated with the interpreted southwest extension of the Midwest structural corridor as it may trend on to the Waterbury project lands on disposition S-107359. Results of the initial survey lines showed that the conductivity associated with the Midwest corridor did not trend onto the Waterbury project lands, and the remainder of the survey was cancelled.

No significant geological mapping has been conducted on the Waterbury Lake property to date as the property is predominantly covered by a thick layer of Quaternary sediments resulting in poor outcrop exposure; however, several reconnaissance scale surface geochemical surveys have been undertaken on the Waterbury Lake property.

Drilling

The THT deposit is well defined, as 268 drill holes have intersected uranium mineralization over a combined east-west strike length of approximately 700 metres and a maximum north-south lateral width of 70 metres. The mineralization thickness varies from tens of centimetres to 19.5 metres and the mineralization is found within several metres of the unconformity at depths of 195 to 230 metres. The THT deposit has been drilled, on average, at 10 metre by 25 metre spacings across the deposit and in some cases a more dense drill spacing has been applied. The genesis and structural complexity of the deposit are well understood.

Aside from THT, target areas that have seen the most drilling are the GB Zone, Oban South, and GB Northeast. A brief summary of each of these target areas is found below:

GB Zone – Nine drill holes were completed during the winter of 2019 to follow up on basement-hosted mineralization discovered during the summer 2018 drilling program. The winter 2019 drill holes were oriented steeply to the northeast on an approximate 100 x 100 metre spacing to test the faulted graphitic basement sequence which dips steeply to the southwest. Basement-hosted mineralization was intersected in drill hole WAT19-480, highlighted by 0.15% U₃O₈ over 6.0 metres, including 0.26% U₃O₈ over 3.0 metres. Additional basement-hosted mineralized intercepts were obtained approximately 100 metres to the southeast of WAT19-480 in drill hole WAT19-486, highlighted by 0.25% U₃O₈ over 2.0 metres and 0.22% U₃O₈ over 1.5 metres.

Oban South – The target area at Oban South comprises the interpreted intersection of the east-west trending Oban South graphitic conductor and the north-northeast trending regional Midwest structure. Three drill holes were completed as an initial test of the geological concept. The drilling successfully identified a faulted graphitic unit within the basement, which was hydrothermally altered, and a broad zone of desilicification within the lower sandstone, which included 10 ppm uranium and over 100 ppm boron within the basal 12.5 metres of sandstone immediately overlying the unconformity.

GB Northeast – A single reconnaissance drill hole, WAT19-493, was completed in 2019 to test a coincident airborne electromagnetic conductor and magnetic low approximately 2.5 kilometres to the northeast of the GB Zone. The drill hole intersected moderately to locally strong sandstone alteration and an altered and faulted graphitic pelite unit immediately below the unconformity. Geochemical sampling returned up to 200 ppm uranium over 0.5 metres, associated with semibrittle graphitic faulting.

The 2022 exploration drilling program focused on two target areas: GB Northeast and Hamilton Lake. A total of 3,153 metres was drilled in 9 holes. Seven holes were completed at GB Northeast, where drilling on each fence identified structurally-controlled alteration potentially indicative of a uranium mineralizing system. The strength of the alteration increased as drilling advanced to the southwest, approaching an interpreted flexure in the conductive trend. Two holes were drilled at Hamilton Lake to test the edges of a broad, N-S trending resistivity anomaly defined from DC-IP resistivity data collected in 2016. No significant structure or alteration was encountered in the two holes drilled at Hamilton Lake.

Sampling, Analysis and Data Verification

For THT, drill core was split once geological logging, sample mark up and photographing were completed. All drill core samples were marked out and split at the splitting shack by employees, put into 5-gallon sample pails and sealed and transported to Points North, Saskatchewan only prior to shipment. The samples were then transported directly to SRC in Saskatoon, Saskatchewan by Marsh Expediting. All geochemical, assay and bulk density samples were split using a manual core splitter over the intervals noted in the sample booklet. Half of the core was placed in a plastic sample bag with the sample tag and taped closed with fibre tape. The other half of the core was returned to the core box in its original orientation for future reference. All drill core samples were evenly and symmetrically split in half in order to try and obtain the most representative sample possible. Mineralized core samples which occur in drill runs with less than 80% core recovery are flagged for review prior to the resource estimation process.

Recovery through the mineralized zone is generally good and assay samples are assumed to adequately represent in situ uranium content. SRC offers an ISO/IEC 17025:2005 accredited method for the determination of U₃O₈ weight % in geological samples. Rock samples are crushed to 60 % at -2 mm, and a 100-200g sub-sample is split out using a riffler. The sub-sample is further crushed to 90% at -106 microns using a standard puck and ring grinding mill. An aliquot of pulp is digested in a concentrated mixture of HNO₃:HCl in a hot water bath for an hour before being diluted with deionized water. Samples are then analyzed by a Perkin Elmer ICP-OES instrument (models DV4300 or DV5300).

Drill core samples collected for bulk density measurements were first weighed as they are received and then submerged in deionized water and re-weighed. The samples are then dried until a constant weight is obtained. The sample is then coated with an impermeable layer of wax and weighed again while submersed in deionized water. Weights are entered into a database and the bulk density of the core waxed and un-waxed (immersion method) is calculated and recorded. Not all density samples had both density measurements recorded. Water temperature at the time of weighing is also recorded and used in the bulk density calculation. The detection limit for bulk density measurements by this method is 0.01 g/cm3.

Prior to the summer 2010 drill program, the only QAQC procedures implemented on drill core samples from the project were those performed internally by SRC. The in-house SRC QAQC procedures involve inserting one to two quality control samples of known value with each new batch of 40 geochemical samples. All of the reference materials used by SRC on the Waterbury project are certified and provided by CANMET Mining and Mineral Services. The SRC internal QAQC program continued through the 2013 drill program. Starting in the summer of 2010 and continuing into the 2013 drill program (discontinued after DDH WAT13-350), an internal QAQC program was designed by Fission to independently provide confidence in the core sample geochemical results provided by SRC. The internal QAQC sampling program determines analytical precision through the insertion of sample duplicates, accuracy through the insertion of materials of “known” composition (reference material) and checks for contamination by insertion of blanks. Blanks, reference standards and duplicates were inserted into the sample sequence including field duplicates (quarter core every 1 in 20 samples), prep and pulp duplicates (inserted by SRC every 1 in 20 samples) and blank samples (1 sample for every mineralized drill hole). Beginning in 2012 certified, internal reference standards were used in all holes drilled at Waterbury Lake, replacing the re-analysed low, medium and high-grade reference samples. The results of the QAQC programs indicate there are no issues with the drill core assay data. The data verification programs undertaken on the data collected from the Project support the geological interpretations, and the analytical and database quality, and therefore the data can support mineral resource estimation.

With respect to its work on the Huskie deposit, Denison has developed and documented several QA/QC procedures and protocols for all exploration projects which include the following components: (a) Determination of precision – achieved by regular insertion of duplicates for each stage of the process where a sample is taken or split; (b) Determination of accuracy – achieved by regular insertion of standards or materials of known composition; and (c) Checks for contamination – achieved by insertion of blanks.

SRC has a quality assurance program dedicated to active evaluation and continual improvement in the internal quality management system. The laboratory is accredited by the Standards Council of Canada as an ISO/IEC 17025 Laboratory for Mineral Analysis Testing and is also accredited ISO/IEC 17025:2005 for the analysis of U₃O₈. The laboratory is licensed by the CNSC for possession, transfer, import, export, use, and storage of designated nuclear substances by CNSC Licence Number 01784-5-24.74. As such, the laboratory is closely monitored and inspected by the CNSC for compliance.

All analyses are conducted by SRC, which has specialized in the field of uranium research and analysis for over 30 years. SRC is an independent laboratory, and no associate, employee, officer, or director of Denison is, or ever has been, involved in any aspect of sample preparation or analysis on samples from the THT or Huskie deposits.

The SRC uses a laboratory management system (“LMS”) for quality assurance. The LMS operates in accordance with ISO/IEC 17025:2005 (CAN-P-4E) “General Requirements for the Competence of Mineral Testing and Calibration Laboratories” and is also compliant to CAN-P-1579 “Guidelines for Mineral Analysis Testing Laboratories”. The laboratory continues to participate in proficiency testing programs organized by CANMET (CCRMP/PTP-MAL).

Mineral Processing and Metallurgical Testing

A preliminary assessment of the mineralogical and leaching characteristics of a representative selection of drill core samples from the THT deposit was undertaken between July and December 2011 by Mineral Services Canada.

The study was based on a suite of 48 samples of mineralized material collected from thirty-two drill holes (2010 and 2011 programs). These were chosen to provide good spatial representation of the THT mineralization as well as representing a wide range of uranium content. The samples were derived from the half split core remaining after the initial geochemical / assay sampling process. All samples were submitted to SRC for comprehensive mineralogical analysis and preparation of thin sections for petrographic analysis. The results of mineralogical work were used, in conjunction with spatial considerations, to define suitable composite samples for preliminary leaching test work undertaken by the Saskatchewan Research Council’s Mining and Minerals Division (“SRCMD”).

Mineralogical analysis, utilizing XRD, quantitative mineralogical analysis (Q-Min), petrography and SEM-EDS analysis, determined that the most abundant uranium-bearing minerals in the THT deposit are uraninite and/or pitchblende, and coffinite. The gangue mineralogy is essentially comprised of various amounts of quartz, phyllosilicates (illite-sericite, chlorite, biotite, kaolinite) and (Fe, Ti)-oxides (hematite, goethite and anatase). Feldspars also occur in most samples and carbonates as well as a variety of sulphides are locally present. Ni-arsenides are recognized throughout the samples as well. The results of the mineralogical analyses identified five groupings of samples with ore mineralogies typically dominated by either uranium oxide or uranium silicate phases.

Preliminary acid leaching tests were undertaken by SRCMD on composite samples prepared from the sample set. Only the leaching time and rate of acid addition were considered in the tests while the other parameters (e.g. solid percentage in the slurry, temperature, pressure and agitation conditions) remained fixed. A total of five composite samples were defined based on spatial location. Acid leaching (H₂SO₄) was performed on each of the composite samples for 12 hours under atmospheric pressure and at a temperature of 55-65°C. Agitation was used to create adequate turbulence. Sodium Chlorate was used as the oxidant. The tests were undertaken on the assay lab rejects from XRD analyses that were ground to 90% passing 106 microns. The percentage of solids in the slurry was set at 50%. The only variables were the acid addition and leaching residence time. Two different H₂SO₄ dosages were used to create an initial leaching environment with 25 mSc/cm and 55 mSc/cm, respectively. Each composite sample was split into two subsamples labelled A and B. The A sample was used to test high acid addition with high initial conductivity and the B sample was used to test low acid addition with low initial conductivity. The preliminary acid leaching tests showed that maximum extraction rates of 97.6 % to 98.5 % U₃O₈ can be obtained (depending on the acid addition) within 4 to 8 hours of leaching time, and that the leaching efficiency was variably affected by acid addition and leaching time.

Additional test work was undertaken in 2020. Leaching tests to determine key ISR data such as optimum reagent addition rates at lower leaching temperatures (10 to 20 degrees Celsius) and expected UBS head grade were conducted and the outcomes were used to drive reagent quantities.

A new composite THT east pod metallurgical testing sample was generated from 33 individual assay reject samples stored at the SRC facilities in Saskatoon. The individual samples, distributed through the deposit, allowed for the preparation of a deposit representative sample. The composite sample assayed 2.72% U₃O₈. Acid leaching tests at 10 deg C, using hydrogen peroxide (H₂O₂) oxidant, with varying sulphuric acid (H₂SO₄) concentrations (100, 80, 60 and 40 g/L) showed that extraction rates of 90% U₃O₈ can be obtained within 2 hours of leaching time, and that the leaching efficiency was affected by acid addition.

Mineral Resource Estimates

The Mineral Resources for the Waterbury Lake Project comprise the THT and the Huskie deposits. The Mineral Resource Statement presented herein represents the Mineral Resource evaluation prepared for the Waterbury Lake Project in accordance with NI 43-101.

Tthe Heldeth Túé Deposit

The THT deposit is estimated to contain an indicated mineral resource, using a base case cut-off grade of 0.10% U₃O₈, totaling 12,810,000 lbs based on 291,000 tonnes at an average grade of 2.00% U₃O₈ (100% basis).

For the 2013 mineral resource estimate, a 3D wireframe model was constructed based generally on a cut-off grade of 0.03 to 0.05 % U₃O₈ which involved visually interpreting mineralized zones from cross sections using histograms of U₃O₈. 3D rings of mineralized intersections were created on each cross section and these were tied together to create a continuous wireframe solid model in Gemcom GEMS 6.5 software. The modeling exercise provided broad controls on the size and shape of the mineralized volume. Inverse distance squared interpolation restricted to a mineralized domain was used to estimate tonnes, density and U₃O₈ grades as well as gold, arsenic, cobalt, copper, molybdenum and nickel grades into the block model.

A range of resources at various U₃O₈ cut-off grades (COG) has been estimated for THT. The current indicated resource is stated using a grade cut-off of 0.10% U₃O₈.

Two passes were used to interpolate all of the blocks in the wireframe, but 99% of the blocks were filled by the first pass. The size of the search ellipse, in the X, Y, and Z direction, used to interpolate grade into the resource blocks is based on 3D semi-variography analysis (completed in GEMS) of mineralized points within the resource model. For the first pass, the search ellipse was set at 25 x 15 x 15 metres in the X, Y, and Z directions, respectively. For the second pass, the search ellipse was set at 50 x 30 x 30 metres in the X, Y and Z directions, respectively. The Principal azimuth is oriented at 75º, the principal dip is oriented at 0° and the Intermediate azimuth is oriented at 0°.

Huskie Deposit

The Huskie Deposit is currently estimated to contain an inferred mineral resource, using a base case cut-of-grade of 0.10% U₃O₈, totaling 5,687,000 lbs U₃O₈ based on 268,000 tonnes at an average grade of 0.96% U₃O₈ (100% basis). The Huskie Deposit resource estimate was prepared by Denison and independently audited and verified to confirm that the mineral resources were estimated in accordance with the widely accepted CIM Estimation of Mineral Resource and Mineral Reserve Best Practices Guidelines. The mineral resources may be affected by further infill and exploration drilling that may result in increases or decreases in subsequent mineral resource estimates. The mineral resources may also be affected by subsequent assessments of mining, environmental, processing, permitting, taxation, socio-economic, and other factors.

For the 2018 mineral resource estimate, GEOVIA GEMS™ software (version 6.8) was used to build three-dimensional mineralized wireframes for the Huskie 1, Huskie 2 and Huskie 3 lenses based on lithological and structural data from core logs and geochemical assay (or radiometric probe) data collected from 28 holes totaling 12,273 metres completed by Denison. A lower cut-off of 0.05% U₃O₈ and a minimum thickness of 1 metre was selected for the mineralized wireframe model.

The mineral resource model was constrained by the mineralization wireframes. The assay database (% U₃O₈ or % eU₃O₈) used for resource modelling consists of 201 assays from the 10 mineralized boreholes, contained within the three mineralized lenses. The 0.5 metre interval assays were composited to 1.0 metre lengths. Capping was considered, with only assay data from Huskie 2 being capped for % U₃O₈. Density values were assigned to the database based on a regression between U₃O₈ and density data pairs using the relationship determined for Denison’s Gryphon deposit, which is also hosted within comparable basement rocks. The validity of the Gryphon grade:density regression for the Huskie deposit was confirmed by plotting 12 bulk dry density samples collected by the technical report authors from the Huskie deposit. Variograms were modelled to determine appropriate search radii for grade estimation.

An accumulation-like approach was used, wherein “U₃O₈*density” and “density” were estimated into a three-dimensional block model, constrained by wireframes in two passes using ID2. A %U₃O₈ grade was then calculated into each block by dividing the estimated U₃O₈*density by the estimated density. A block size of 10 by 5 by 5 metres was selected. Search radii were based primarily on visual observations and variogram analyses. The estimation of U₃O₈*density and density were based on two estimation passes. The block model was validated using nearest neighbour estimation and by visual inspection of the block grades relative to composites and swath plots comparing the ID2 and nearest neighbour model. All blocks were classified as Inferred.

No pre-feasibility or feasibility studies have been completed to allow conversion of the mineral resources to mineral reserves. Consequently, no mineral reserves exist for the Waterbury Lake property at the present time.

Mining Operations

The THT deposit is proposed to be mined using the ISR method. The Indicated Mineral Resource used for the Waterbury PEA mine plan includes only the THT East pod, estimated at 9.7 million pounds of U₃O₈ with an average grade of 2.49% over 178,000 tonnes.

A small percentage of the THT East pod resource has not been included in the mine plan due to sterilization by freeze methods. Due to the geometry of the deposit and the nature of freeze technology applied to the deposit to allow for sufficient containment of mining fluid, the extreme western and easternmost portions of the deposit have not been considered in the Potentially Recoverable Resource. The collective resource attributed to sterilization is 206,180 lbs, representing 1.7% of the THT East pod.

Additionally, an 85% mining recovery factor was applied to the projected resource available for mining to account for sweep efficiencies and metallurgical recovery envisioned and deemed appropriate for the nature of the THT deposit. The mining recovery factor is a product of the metallurgical recovery and sweep efficiencies based on knowledge gained during the project development of the Phoenix deposit utilizing the ISR method. The sweep efficiency is defined as the percentage of mineralized rock in contact with the lixiviant as it circulates between the injection wells and surrounding recovery wells. The metallurgical recovery is determined by the amount and rate at which the uranium dissolves from the rock when in contact with the lixiviant.

Tthe Heldeth Túé East Pod Projected Mine Production (0% Grade cut-off ⁽¹⁾)

(1)            Projected Mine Production presented at a 0% grade cut off to reflect nonselective ISR mining method.

The foregoing is based upon estimated indicated mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

A key hydrologic property that affects ISR mining is the permeability (hydraulic conductivity) of the ore zone and, just as importantly, the hydraulic communication (interconnectedness of the permeability/porosity) across the ore zone. The ability to transmit fluids through the ore body via well injection and recovery is fundamental to the efficacy of ISR mining.

Denison has performed permeameter testing of exploratory boring cores that were recovered from the ore zone and overlying and underlying strata at the site. The permeameter testing was conducted utilizing a portable nitrogen gas probe permeameter adapted for testing drill core pieces. Permeameter testing measures the matrix permeability of the core sample. Permeameter testing was performed by applying an epoxy ring at the sample location and sealing the permeameter probe against the ring to ensure a tight seal. Pressure is measured upstream of the probe tip at a sampling interval of two seconds, and the pressure decay of the nitrogen gas injection is measured to determine permeability in the drillcore at the sample location. In general, the gas pressure pulse applied to the drillcore is approximately 30 to 50 psi, and test durations are less than 20 minutes per test. This methodology was applied extensively at the Phoenix project, with testing conducted on core at approximate 10 centimeter intervals, resulting in a total of over 1,200 measurements.

Permeameter test results were reported for 150 core sample measurements in the THT East pod. Of the 150 measurements, 25 were from core collected within the mineralized zone, 43 were from the overlying Athabasca Sandstones, with the remainder from the underlying metasedimentary basement. The samples were further grouped into lithologic units.

The median hydraulic conductivity value for all of the mineralized samples for the THT is 1.1E-10 m/s with a range of 1.0E-13 to1.7E-07 m/s. The matrix permeability test work conducted for the Phoenix deposit at Wheeler River and outlined in Denison’s press release dated February 24, 2020 shows hydraulic conductivity values ranging from 1.5 x 10-13 to 5.0 x 10-6 m/s for the Phoenix Deposit: the permeameter testing results from cores collected from borings at the Phoenix project correlates reasonably well to the hydraulic conductivity values published from the pumping and injection tests conducted at Phoenix. The data from Phoenix suggest that permeameter data can provide a reasonable initial estimate of hydraulic conductivity.

Given the positive correlation between bulk hydraulic conductivity testing and permeameter testing of core samples in estimating hydraulic conductivity at the Phoenix deposit at Wheeler River, it is reasonable to assume a similar correlation for the THT deposit based on a comparable geologic setting. The recently conducted permeameter testing from the THT deposit should provide a reasonable initial estimate of hydraulic conductivity, although, the degraded state of the core most likely biased the tested samples toward lower permeabilities. Based on the currently available data, the hydraulic conductivity estimated from the THT permeameter testing appears to be notably lower than what was estimated for the Phoenix Project.

Several factors should be considered in the evaluation of permeability and its potential impacts to ISR mining applied to the THT deposit. First, as previously indicated, the samples suitable for conducting the permeameter testing are biased toward the more dense and intact (and likely lower permeability) core material. Second, the inter-well spacing (distance between wells within a well pattern) planned for the project will be less than what is proposed for the Wheeler River project at the Phoenix deposit, which will reduce the residence time for lixiviant to move from injection well to extraction well. Third, application of permeability enhancement methods will be utilized to increase the near well-bore permeability within the mineralized zone.

In conventional ISR operations, containment of the mining solution is typically achieved by natural impermeable bounding layers in the geological strata and/or by creating a natural drawdown (via pumping) of the water table towards the ore zone. At the THT deposit, there is a natural impermeable layer below the deposit, in the form of a competent package of basement rocks, but the deposit is otherwise hydraulically connected to the vast regional groundwater system in the overlying sandstone formation that defines the Athabasca Basin.

In order to maintain containment, the entire deposit will be isolated by use of an artificial and impermeable freeze wall that will surround the deposit. The freeze wall will be established by drilling a series of cased holes from surface and along the perimeter of the deposit, and keyed into the basement rock. The freeze wall will be comprised of 92 holes planned at a 7 metre spacing at the target depth of 200 metres and extend 30 metres below the unconformity elevation. The freeze wall is planned to be drilled entirely from land on the peninsula on McMahon Lake which extends to the eastern portion of THT. Freeze holes will be angled out to surround the mining zone with the minimum drilling angle limited to 45º to reduce technical risk of drilling and installing the freeze holes. Circulation of a low temperature brine solution in the holes will remove heat from the ground, freezing the natural groundwater, and establishing an impermeable frozen wall around the deposit.

The wellfield design included in the Waterbury PEA uses 184 wells at 7 metre spacing arranged in a 5-spot pattern, with four injection wells around one recovery well. The wells will be drilled from surface within the freeze wall and angled out to penetrate the mineralized zone at depth with a roughly 7 metre spacing.

Eight MWs will be installed outside of the freeze wall to detect and remediate any excursion of lixiviant from the mining zone.

Proposed THT Wellfield and Freeze wall configuration

Processing and Recovery Operations

Final mineral processing of the UBS expected to be recovered from the THT deposit is assumed to occur at the nearby McClean Lake mill. The mill is owned by the MLJV of which Orano Canada holds a 77.5% interest, and Denison Mines Inc. (a wholly-owned subsidiary of Denison) holds a 22.5% interest. The mill is currently processing material from the Cigar Lake mine under a toll milling agreement (up to 18 million lbs U₃O₈ per year); however, it has approximately 6 million lbs U₃O₈ per year in additional licenced processing capacity, with a total licensed capacity of up to 24 million lbs U₃O₈ per year. The Waterbury PEA assumes a recovery rate of 98.5% from the processing of UBS from the THT deposit at the McClean Lake mill.

It is assumed that the UBS will be transported to McClean Lake in trucks utilizing specifically designed tanks for transportation. The trucks would return with necessary lixiviant to complete ISR mining at THT. The McClean Lake Mill is assumed to have all necessary infrastructure to process the UBS and provide the lixiviant except for the facilities to provide surge storage of UBS and lixiviant at both the THT site and at McClean Lake.

The limited metallurgical testing of the THT deposit and a review of the Roughrider PEA indicates that a UBS head grade of 7 g/l may be possible through enhanced permeability techniques commercially available. The metallurgical tests completed during the Waterbury PEA indicate that approximately 27,000 tonnes of sulphuric acid will be required to leach the approximate 10 million lbs of U₃O₈ located within the THT East pod. Approximately 9,000 tonnes of hydrogen peroxide will be required. Lixiviant concentrations of 35 g/L hydrogen peroxide and 100 g/L of sulphuric acid have been estimated from metallurgical leach tests. Currently available data from metallurgical leach tests indicate no iron needs be added to the lixiviant.

Processing THT at the McClean Lake mill would require minor mill modifications. THT UBS, trucked to the mill, would be stored in a tank or pond, providing surge capacity for both the mine and mill. From the UBS storage it would be pumped into the mill leach circuit. The McClean mill may find it advantageous to mix the UBS into their leaching process to take advantage of the low pH, reducing acid addition rates for their other feed streams. Following CCD solution clarification, the solution would be processed as per the current mill flowsheet.

Toll milling agreement terms have not been assessed as part of this study. UBS from the THT deposit at a production rate 2.1 million lbs of U₃O₈/yr will make up a small portion of the entire McClean Lake mill feed (estimated in the range of 10 to 15%). Final drummed “yellowcake” will be a blend of the entire feed stream through McClean. The THT deposit is a relatively clean ore feed source in comparison to either Cigar Lake or the Midwest deposits both of which have contaminates of concern, that could result in penalties at the refinery. The scope of this study has not considered what other ores will be co-milled with the THT UBS, and therefore the final product make-up cannot be determined.

Infrastructure, Permitting and Compliance Activities

The THT site infrastructure has been modelled after the Wheeler River Phoenix infrastructure scaled appropriately for the requirements of the THT project.

Main land access to the site is from Saskatchewan Highway 905, via a road developed by Rio Tinto for their Roughrider exploration requirements. A road extension of 1.5 km will be required to access the ISR wellfield. Additionally, the existing road has been assumed to be upgraded from highway 905 to facilitate trucking of UBS and lixiviant.

Due to the initial capital costs required to install a standalone processing plant at THT, processing of the THT deposit is expected to occur at the McClean Lake mill with the UBS being transported via trucks from the THT site to McClean Lake on the existing provincial road (45 kilometre one way). The trucks would complete the return trip to THT loaded with lixiviant.

Electrical power has been chosen for the PEA to be fed from a substation located approximately 13 km from the THT Site. Power has been assumed to be brought to site at 25 kV. A tradeoff study was completed as part of this study to compare line power to power generated at site, the conclusion of which favored line power. Additional work studying transmission and distribution options is required should further studies be completed.

The planned surface infrastructure at the THT site includes:

The planned infrastructure at McClean Lake includes:

At this stage, no environmental fatal flaws have been identified for the project. Through project design and implementation of various best management practices, project effects on the environment are expected to be avoided or minimized while meeting all applicable environmental guidelines and regulations. Given the proximity of the project to a surface waterbody it is likely that the most significant public concern will be the potential impacts to the lake, and it will be imperative for Denison to demonstrate how the groundwater and surface water environments will remain protected. The project will require completion of a provincial environmental assessment and federal licensing which includes the review of the environmental assessment to support a licensing decision. The approval process is anticipated to take 24 months following the submission of the draft licensing and environmental impact assessment documents.

Denison recognizes the importance of early identification of Interested Parties, and in particular, Indigenous and non-Indigenous Communities of Interest who may have an interest in the THT project based on historical and / or contemporary land use activities, known and asserted traditional territories, and / or historical precedent with the uranium industry in the eastern Athabasca Basin region. As noted above, also of importance is the strong interest most Interested Parties hold with respect to the protection of water, further underscoring the need for a proper and complete engagement strategy. As part of this process, Denison has identified a number of potential Communities of Interest for the THT project and can begin the process of suitable and appropriate engagement for the stage of the development of the THT project. This will assist Denison to determine the number and scale of Impact Benefit Agreements, which are often an important element as part of advancing a resource extraction project through the regulatory process in Canada.

Capital and Operating

The capital costs for the THT project were estimated relying on available data from the Wheeler PFS Report and the 2016 NI 43-101 Cigar Lake Operation Technical Report, as well as based on quotes and first principles estimates. The initial capital investment is estimated at $111.6 million, sustaining capital at $24.8 million and decommissioning costs at $25.2 million. The initial CAPEX includes a 30% contingency and excludes $20.1 million of project evaluation costs that must be incurred prior to construction. These costs should be considered when assessing the merit of advancing the project to a development decision in the future. The THT capital costs are outlined as follows: