EX-99.1
2
dmc-prmarch32022yearendre.htm
PRESS RELEASE DATED MARCH 3, 2022
dmc-prmarch32022yearendre
Exhibit 99.1
Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
PRESS
RELEASE
Denison Reports Strong Operational and Financial Results for
2021
Backed by Improving Uranium Market and $41.4 million
gain
on Physical Uranium
Holdings
Toronto, ON – March 3,
2022. Denison Mines Corp. (‘Denison’ or the
‘Company’) (TSX: DML, NYSE American: DNN) today filed
its Audited Consolidated Financial Statements and
Management’s Discussion & Analysis
(‘MD&A’) for the year ended December 31, 2021. Both
documents will be available on the Company’s website
at www.denisonmines.com
or on SEDAR (at www.sedar.com)
and EDGAR (at www.sec.gov/edgar.shtml).
The highlights provided below are derived from these documents and
should be read in conjunction with them. The Company’s
results are highlighted by earnings attributable to Denison
shareholders of $0.02 per share for the year ended December 31,
2021. All amounts in this release are in Canadian dollars unless
otherwise stated.
David Cates, President and CEO of Denison
commented, "Our results from 2021 reflect
a significant improvement in the uranium market, as well as
continued operational progress advancing Wheeler River’s
Phoenix uranium deposit (‘Phoenix’) towards a
development decision.
Less than twelve months ago, Denison
completed a novel project financing initiative in support of the
future development of the Wheeler River project, involving the
purchase of 2.5 million pounds U3O8
in physical uranium holdings at an
average cost of US$29.66/lb U3O8.
The financing was designed to position our shareholders to benefit
from the additional financial stability of our uranium holdings,
while remaining fully leveraged to any future appreciation of
uranium prices that might occur prior to the completion of a
project financing for Wheeler River. Since then, the uranium spot
market has improved considerably, with continued support from
financial investors, leading to a significant increase in the spot
price in 2021 and a $41.4 million gain on Denison’s physical
uranium holdings.
The improvement in the spot price was not only positive for
Denison’s balance sheet, but it also appears to have
catalyzed further fundamental developments in the long-term supply
market. We have seen nuclear utilities seek to address significant
future uncovered requirements in an environment with reduced
visibility to available sources of supply – leading to
increased long-term contracting activity and prices. Combined with
positive demand signals coming from a growing chorus of support for
the critical role nuclear must play in the clean energy transition,
the narrative for the development of new top tier new uranium
mining projects has become quite positive.
Now several years into Denison’s long-term plan for the
advancement of Wheeler River, our Company is uniquely aligned with
the improving uranium market, as we continue to successfully
demonstrate the potential for the Phoenix deposit to emerge as the
first In-Situ Recovery (‘ISR’) uranium mine in the
Athabasca Basin region. Our de-risking efforts at Phoenix have
involved extensive field and laboratory testing since completion of
the Pre-Feasibility Study in 2018, which to date culminated in the
completion of the installation and field testing of a 5-spot
commercial-scale ISR test pattern in 2021. The field test was
highly successful and confirmed key technical assumptions made in
the PFS. Taken together with our positive metallurgical results,
our work in 2021 has demonstrated tangible support for our
selection of the ISR mining method for Phoenix and our decision to
initiate a formal Feasibility Study.
Our plans for 2022 are ambitious – with a primary focus on
driving towards the completion of key technical and regulatory
milestones for Wheeler River, while also supporting a secondary
focus of unlocking value from Denison’s vast project
portfolio, including continued exploration amongst our many
highly-prospective property interests, and the initial evaluation
of potential development plans for both the Midwest and McClean
Lake projects.”
Highlights
■
Completed highly successful ISR Field Tests at Phoenix, resulting
in significant de-risking and supporting the decision to advance to
a formal Feasibility Study (‘FS’)
The Company
continued its systematic approach to de-risking the technical risks
identified for the ISR mining operation for Phoenix at the Wheeler
River Uranium Project (‘Wheeler River’), following
completion of the 2018 Pre-Feasibility Study (‘PFS’).
Notably, in 2021 the Company completed a highly successful ISR
field test program including the installation and testing of a
pattern of five commercial scale wells
(‘CSWs’).
The results
from the field test were highlighted by the following:
■
Achieved
commercial-scale production flow rates consistent with those
assumed in the PFS;
■
Demonstrated
hydraulic control of injected solution during an ion tracer
test;
■
Established
breakthrough times between injection and recovery wells consistent
with previously prepared estimates; and
■
Demonstrated
the ability to remediate the five-spot CSW test pattern
(‘Test Pattern’).
Additionally,
positive results from ongoing metallurgical test work supported the
decision to increase the anticipated ISR mining head-grade for
Phoenix by 50%.
Given
consistently positive results from field testing and laboratory
testing, Denison and the Wheeler River Joint Venture approved the
initiation of the formal FS report process for the Phoenix ISR
project, and appointed Wood PLC as independent lead author of the
FS.
■
Secured funding to complete the Environmental Assessment
(‘EA’) and FS process for Wheeler River
Denison
completed a series of equity financings during 2021 intending to
fund the EA and FS processes for Wheeler River. These financings
raised gross proceeds of $48.2 million (including $11.9 million
from At-the-Market offerings) from the issuance of 39.7 million
common shares and 15.8 million common share purchase warrants.
Based on current estimates, the net proceeds from these financings
are expected to be sufficient to fund the completion of the FS and
EA processes for Wheeler River.
■
Executed a Wheeler River project financing initiative involving the
strategic acquisition of physical uranium and recorded significant
uranium investment gains
In March 2021, Denison successfully completed a
public offering of units for gross proceeds of $107.9 million. The
majority of the net proceeds of the offering were used to fund the
strategic purchase of 2.5 million pounds of uranium concentrates
(‘U3O8‘)
at a weighted average price of US$29.66 per pound
U3O8.
The uranium is being held by Denison as a long-term investment,
which is intended to support the potential future financing of the
advancement and/or construction of Wheeler
River.
The uranium spot price appreciated to US$42.00 per
pound U3O8
by December 31, 2021, resulting in a
fair value gain on the Company’s physical uranium holdings of
$41,440,000 for the year ended December 31,
2021.
■
Obtained funding for high-potential exploration programs in 2021
and 2022
The Company
raised gross proceeds of $8.0 million in March 2021, from the
issuance of common shares on a flow-through basis, to fund eligible
Canadian exploration activities in 2021 and 2022.
■
Acquired 50% of JCU (Canada) Exploration Company, Limited
(‘JCU’) for $20.5 million
In August
2021, Denison completed the acquisition of 50% of JCU from UEX
Corporation (‘UEX’) for cash consideration of $20.5
million following UEX’s acquisition of 100% of JCU from
Overseas Uranium Resources Development Co., Ltd. for $41 million.
JCU holds a portfolio of 12 uranium project joint venture interests
in Canada, including a 10% interest in Wheeler River, a 30.099%
interest in the Millennium project (Cameco Corporation, 69.901%), a
33.8123% interest in the Kiggavik project (Orano Canada Inc.,
66.1877%), and a 34.4508% interest in the Christie Lake project
(UEX, 65.5492%).
■
Advanced actions to support reconciliation with Indigenous
peoples
Denison
formally adopted an Indigenous People’s Policy
(‘IPP’) in 2021, which reflects the Company’s
recognition of the important role of Canadian business in the
process of reconciliation with Indigenous peoples in Canada and
outlines the Company’s commitment to take action towards
advancing reconciliation.
Also in 2021,
the Company entered into a Participation and Funding Agreement and
Letter of Intent with the English River First Nation
(‘ERFN’) in connection with the advancement of the
proposed ISR operation at Wheeler River, as well as an Exploration
Agreement in respect of Denison’s exploration and evaluation
activities within the ERFN traditional territories. These
agreements reflect Denison’s desire to operate its business
in a progressive and sustainable manner that respects ERFN rights
and advances reconciliation with Indigenous peoples. The agreements
provide ERFN with economic opportunities and other benefits, and
establish a foundation for future collaboration in an authentic,
cooperative, and respectful way.
■
Discovery of high-grade uranium outside of the Phoenix Zone A
high-grade domain
Drill hole GWR-045, completed as part of the ISR
field test program as a monitoring well to the northwest of the CSW
Test Pattern, was, based on the mineral resources currently
estimated for Phoenix, expected to intersect low grade uranium
mineralization on the northwest margin of the deposit. The drill
hole, however, intersected a thick interval of high-grade
unconformity-associated uranium mineralization grading 22.0%
eU3O8
over 8.6 metres. Follow up drilling
returned multiple additional intersections of high-grade uranium
mineralization, including 24.9% eU3O8
over 4.2 metres in drill hole GWR-049.
Taken together, these results are expected to expand the volume of
the high-grade domain to the northwest in the Phase 1 area of
Phoenix Zone A.
■
Sold shares and warrants in GoviEx Uranium Limited
(‘GoviEx’) for proceeds of up to $41.6
million
In October
2021, the Company sold 32,500,000 common shares of GoviEx,
previously held by Denison for investment purposes, and 32,500,000
common share purchase warrants, entitling the holder to acquire one
additional common share of GoviEx owned by Denison at an exercise
price of $0.80 for a term of up to 18 months (the ‘GoviEx
Warrants’). Denison received gross proceeds of $15,600,000 on
the sale of the shares and warrants and continues to hold
32,644,000 common shares of GoviEx. If the GoviEx Warrants are
exercised in full, Denison will receive further gross proceeds of
$26,000,000 and will transfer a further 32,500,000 GoviEx common
shares to the warrant holders.
■
Received $5.8 million in connection with the conversion of Uranium
Participation Corporation (‘UPC’) into the Sprott
Physical Uranium Trust
In April
2021, UPC announced that it had reached an agreement with Sprott
Asset Management LP (‘Sprott’) for the Sprott Physical
Uranium Trust to acquire UPC (the ‘UPC Transaction’).
Upon completion of the UPC Transaction on July 19, 2021, Sprott
became the manager of the Sprott Physical Uranium Trust, and the
management services agreement (‘MSA’) between Denison
and UPC was terminated. In accordance with the terms of the MSA,
Denison received a cash payment of approximately $5.8 million in
connection with the termination.
About Denison
Denison Mines
Corp. was formed under the laws of Ontario and is a reporting
issuer in all Canadian provinces and territories. Denison’s
common shares are listed on the Toronto Stock Exchange (the
‘TSX’) under the symbol ‘DML’ and on the
NYSE American exchange under the symbol
‘DNN’.
Denison is a
uranium exploration and development company with interests focused
in the Athabasca Basin region of northern Saskatchewan, Canada. The
Company has an effective 95% interest in its flagship Wheeler River
Uranium Project, which is the largest undeveloped uranium project
in the infrastructure rich eastern portion of the Athabasca Basin
region of northern Saskatchewan. A PFS was completed for Wheeler
River in late 2018, considering the potential economic merit of
developing Phoenix as an ISR operation and the Gryphon deposit as a
conventional underground mining operation. Denison's interests in
Saskatchewan also include a 22.5% ownership interest in the McClean
Lake Joint Venture, which includes several uranium deposits and the
McClean Lake uranium mill, which is contracted to process the ore
from the Cigar Lake mine under a toll milling agreement (see
RESULTS OF OPERATIONS below for more details), plus a 25.17%
interest in the Midwest Main and Midwest A deposits and a 66.90%
interest in the Tthe Heldeth Túé (‘THT,’
formerly J Zone) and Huskie deposits on the Waterbury Lake
property. The Midwest Main, Midwest A, THT and Huskie deposits are
located within 20 kilometres of the McClean Lake mill.
Through its
50% ownership of JCU, Denison holds additional interests in various
uranium project joint ventures in Canada, including the Millennium
project (JCU, 30.099%), the Kiggavik project (JCU, 33.8123%) and
Christie Lake (JCU, 34.4508%).
Denison’s
exploration portfolio includes further interests in properties
covering approximately 297,000 hectares in the Athabasca Basin
region.
Denison is also
engaged in mine decommissioning and environmental services through
its Closed Mines group, which manages Denison’s Elliot Lake
reclamation projects and provides third-party post-closure mine
care and maintenance services.
Prior to July 19,
2021, Denison also served as the manager of UPC, a publicly traded
company listed on the TSX that invested in U3O8 and uranium
hexafluoride (‘UF6’). In April
2021, UPC announced that it had entered into an agreement with
Sprott to convert UPC into the Sprott Physical Uranium Trust. This
transaction closed on July 19, 2021, and the MSA between Denison
and UPC was terminated.
Technical Disclosure and Qualified Person
The technical
information contained in this press release has been reviewed and
approved by David Bronkhorst, P.Eng, Denison's Vice President,
Operations and/or Andrew Yackulic, P. Geo, Denison's Director,
Exploration, each of whom is a Qualified Person in accordance with
the requirements of NI 43-101.
Certain
information contained in this press release constitutes
‘forward-looking information’, within the meaning of
the applicable United States and Canadian legislation concerning
the business, operations and financial performance and condition of
Denison.
Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as ‘plans’,
‘expects’, ‘budget’,
‘scheduled’, ‘estimates’,
‘forecasts’, ‘intends’,
‘anticipates’, or ‘believes’, or the
negatives and/or variations of such words and phrases, or state
that certain actions, events or results ‘may’,
‘could’, ‘would’, ‘might’ or
‘will be taken’, ‘occur’, ‘be
achieved’ or ‘has the potential to’.
In particular,
this press release contains forward-looking information pertaining
to the following: projections with respect to exploration,
development and expansion plans and objectives, including the plans
and objectives for Wheeler River and the related evaluation field
program activities and exploration objectives; the interpretation
of the results of the ISR field test, metallurgical and other
assessment and de-risking activities at Wheeler River; the
interpretation of the results of its exploration drilling programs;
plans and objectives for the feasibility study and agreements with
third parties related thereto; its use of proceeds of recent
financings; its investments in uranium; the estimates of Denison's
mineral reserves and mineral resources or results of exploration;
expectations regarding Denison’s joint venture ownership
interests; expectations regarding the continuity of its agreements
with third parties; and its interpretations of, and expectations
for, nuclear energy and uranium demand. Statements relating to
‘mineral reserves’ or ‘mineral resources’
are deemed to be forward-looking information, as they involve the
implied assessment, based on certain estimates and assumptions that
the mineral reserves and mineral resources described can be
profitably produced in the future.
Forward looking
statements are based on the opinions and estimates of management as
of the date such statements are made, and they are subject to known
and unknown risks, uncertainties and other factors that may cause
the actual results, level of activity, performance or achievements
of Denison to be materially different from those expressed or
implied by such forward-looking statements. For example, the
results and underlying assumptions and interpretations of the PFS
as well as de-risking efforts such as the ISR field programs
discussed herein may not be maintained after further testing or be
representative of actual conditions within the applicable deposits.
In addition, Denison may decide or otherwise be required to extend
the EA and/or the FS and/or otherwise discontinue testing,
evaluation and development work if it is unable to maintain or
otherwise secure the necessary approvals or resources (such as
testing facilities, capital funding, etc.). Denison believes that
the expectations reflected in this forward-looking information are
reasonable, but no assurance can be given that these expectations
will prove to be accurate and results may differ materially from
those anticipated in this forward-looking information. For a
discussion in respect of risks and other factors that could
influence forward-looking events, please refer to the factors
discussed in Denison’s Management’s Discussion &
Analysis for the year ended December 31, 2021 under the heading
‘Risk Factors’. These factors are not, and should not
be, construed as being exhaustive.
Accordingly,
readers should not place undue reliance on forward-looking
statements. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement. Any
forward-looking information and the assumptions made with respect
thereto speaks only as of the date of this press release. Denison
does not undertake any obligation to publicly update or revise any
forward-looking information after the date of this press release to
conform such information to actual results or to changes in
Denison's expectations except as otherwise required by applicable
legislation.
Cautionary Note to United States Investors
Concerning Estimates of Mineral Resources and Mineral
Reserves: This press release may use terms such as
“measured”, “indicated” and/or
“inferred” mineral resources and “proven”
or “probable” mineral reserves, which are terms defined
with reference to the guidelines set out in the Canadian Institute
of Mining, Metallurgy and Petroleum (“CIM”) CIM
Definition Standards on Mineral Resources and Mineral Reserves
(“CIM Standards”). The Company’s descriptions of
its projects using CIM Standards may not be comparable to similar
information made public by U.S. companies subject to the reporting
and disclosure requirements under the United States federal
securities laws and the rules and regulations thereunder.
United States investors are
cautioned not to assume that all or any part of measured or
indicated mineral resources will ever be converted into mineral
reserves. United States investors are also cautioned not to assume
that all or any part of an inferred mineral resource exists, or is
economically or legally mineable.