EX-99.2
3
a2021-metallurgypressrele.htm
PRESS RELEASE DATED AUGUST 4, 2021
a2021-metallurgypressrele
Exhibit 99.2
Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
PRESS
RELEASE
DENISON REPORTS DECISION TO INCREASE ANTICIPATED
ISR MINING HEAD GRADE AT PHOENIX BY 50%
Toronto, ON –August 4,
2021. Denison Mines Corp. (“Denison” or the
“Company”) (DML: TSX, DNN: NYSE American) is pleased to
report positive interim results from the ongoing metallurgical test
program for the planned In-Situ Recovery (“ISR”) mining
operation at the Phoenix uranium deposit (“Phoenix”),
located on the Company’s 90% owned Wheeler River Uranium
Project (“Wheeler River” or the “Project”).
Test work completed to date, has consistently supported an ISR
mining uranium head-grade
for Phoenix in excess of the 10 grams / Litre (“g/L”)
assumed in the Pre-Feasibility Study (“PFS”) completed
for Wheeler River in 2018. Accordingly, the Company has decided to
adapt its plans for the remaining metallurgical test work,
including the bench-scale tests of the unit operations of the
proposed process plant, to reflect a 50% increase in the head-grade
of uranium bearing solution (“UBS”) to be recovered
from the well-field.
David Bronkhorst, Denison’s Vice President
Operations, commented, “The
metallurgical testing completed to date demonstrates that uranium
can be consistently recovered from Phoenix cores at levels
significantly higher than the 10 g/L extraction rate used in the
PFS – giving rise to a decision to adapt future unit
operation metallurgical tests to use a UBS head-grade of 15
g/L.
A 50% increase in head-grade is expected to translate into
meaningful optimization of previously estimated operating
parameters and processing plant designs while maintaining the same
level of annual uranium production – with the potential to
reduce operating costs related to on-surface processing activities,
and initial capital costs associated with the processing
plant.”
Phoenix is expected to be mined in several phases,
with Phase 1 estimated to contain 22.2 million pounds
U3O8
(37,242 tonnes at 27.1%
U3O8,
above a cut-off grade of 0.8% U3O8)
in Probable mineral reserves (see Press Release dated December 1,
2020). Accordingly, the sample selection for recent metallurgical
test work has favored samples representative of the mineralization
in Phase 1, to allow for a greater understanding of optimal
leaching conditions required in the area where first production is
expected.
Core Leach Test Results
Three core samples, representing the
high-grade/low-clay characteristics of the majority of the
mineralization in the Phase 1 mining area, have been tested to
date, with results summarized below in Table 1 – showing
steady-state and average UBS head grades significantly above the
10g/L level used in the PFS.
In addition to
the high-grade/low clay characteristics of Phase 1, the Phoenix ISR
operation is also expected to encounter comparatively rare and
isolated areas with lower uranium grades and high clay content,
which is expected to 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 samples presenting
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 confirm 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.
As outlined in
Table 2, below, sample 2A failed to produce an acceptable
“steady-state” UBS head grade. Sample 2B was taken from
the same drill hole and presented similar mineralogical
characteristics as Sample 2A; however, Sample 2B was modified to
simulate the MaxPERF permeability enhancement tool. As is evident
from the achievement of a peak UBS head-grade of 76 g/L and an
average UBS head-grade of 24.9 g/L obtained over 28 days of steady
state, the preliminary leaching results from Sample 2B confirm both
the utility of permeability enhancement in normalizing the natural
permeability in high clay zones and the appropriateness of the
decision to increase the overall UBS head-grade assumption for
Phoenix.
Table 2 – Summary Results from medium Grade/ High clay Core
Leach Tests
Sample #2A
Sample #2B(1)
Sample diameter
61mm
61mm
Sample length
12cm
10cm
Sample grade (U3O8)
28%
28%
Clay Content
High
High
Permeability Enhancement
No
Yes
UBS range in steady state (U)
N/a
5.8g/L to 76.0
g/L
UBS average interval (U)
3.8g/L over 1
day
24.9 g/L over 28
days
Notes: (1)
Core test is still in progress.
Results are as of August 3, 2021.
Column Leach Tests
Various column
leach tests have recently been completed using core samples from
Phoenix. 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 were 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 (1.3 kg acid / kg U3O8 and 1.2 kg
oxidant / kg U3O8) have also
provided useful information that is supportive of the values
published in the PFS.
The
laboratory work for the 2021 Metallurgical Program is being carried
out at the Saskatchewan Research Council ("SRC") Mineral Processing
and Geoanalytical Laboratories, in Saskatoon, under the supervision
of Mr. Chuck Edwards (P.Eng., FCIM).
About Phoenix Phase 1
Phase 1 of Phoenix is estimated to contain approximately
22.2 million pounds U3O8 (37,242 tonnes at
27.1% U3O8, above a cut-off
grade of 0.8% U3O8) in Probable
mineral reserves. Based on current designs, the Company
estimates approximately 6.6 million pounds U3O8 (7,717 tonnes at
39.2% U3O8, above a cut-off
grade of 0.8% U3O8) in Probable
mineral reserves are contained within the expected operating
perimeter of the Test Pattern (see Figure 1).
These estimates are derived as a direct subset of those reported in
the Technical Report titled "Pre-feasibility Study for the Wheeler
River Uranium Project, Saskatchewan, Canada"
dated October 30, 2018 with an effective date
of September 24, 2018 (the “PFS Report”). The key
assumptions, parameters and methods used to estimate the mineral
reserves herein remain unchanged.
About Wheeler River
Wheeler River is the largest undeveloped uranium project in the
infrastructure rich eastern portion of the Athabasca Basin region,
in northern Saskatchewan – including combined Indicated
Mineral Resources of 132.1 million pounds U3O8 (1,809,000 tonnes
at an average grade of 3.3% U3O8), plus combined
Inferred Mineral Resources of 3.0 million pounds U3O8 (82,000 tonnes at
an average grade of 1.7% U3O8). The project is
host to the high-grade Phoenix and Gryphon uranium deposits,
discovered by Denison in 2008 and 2014, respectively, and is a
joint venture between Denison (90% and operator) and JCU (Canada)
Exploration Company Limited (10%).
A PFS was completed for Wheeler River in late 2018, considering the
potential economic merit of developing the Phoenix deposit as an
ISR operation and the Gryphon deposit as a conventional underground
mining operation. Taken together, the project is estimated to have
mine production of 109.4 million pounds U3O8 over a 14-year
mine life, with a base case pre-tax NPV of $1.31 billion (8%
discount rate), Internal Rate of Return ("IRR") of 38.7%, and
initial pre-production capital expenditures of $322.5 million. The
Phoenix ISR operation is estimated to have a stand-alone base case
pre-tax NPV of $930.4 million (8% discount rate), IRR of 43.3%,
initial pre-production capital expenditures of $322.5 million, and
industry leading average operating costs of US$3.33/lb
U3O8.
The PFS is prepared on a project (100% ownership) and pre-tax
basis, as each of the partners to the Wheeler River Joint Venture
are subject to different tax and other obligations.
Further details regarding the PFS, including additional scientific
and technical information, as well as after-tax results
attributable to Denison's ownership interest, are described in
greater detail in the PFS Report. A copy of the PFS report is
available on Denison's website and under its profile on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
Denison suspended certain activities at Wheeler River during 2020,
including the EA process, which is on the critical path to
achieving the project development schedule outlined in the PFS.
While the EA process has resumed, the Company is not currently able
to estimate the impact to the project development schedule outlined
in the PFS, and users are cautioned against relying on the
estimates provided therein regarding the start of pre-production
activities in 2021 and first production in 2024.
About Denison
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.
Denison's interests in Saskatchewan also include a 22.5% ownership
interest in the McClean Lake joint venture ("MLJV"), which includes
several uranium deposits and the McClean Lake uranium mill that is
contracted to process the ore from the Cigar Lake mine under a toll
milling agreement, plus a 25.17% interest in the Midwest Main and
Midwest A deposits, and a 66.90% interest in the Tthe Heldeth
Túé ("THT," formerly J Zone) and Huskie deposits on the
Waterbury Lake property. Each of Midwest Main, Midwest A, THT and
Huskie are located within 20 kilometres of the McClean Lake
mill.
Through its 50% ownership of JCU (Canada) Exploration Company,
Limited (“JCU”), Denison also holds 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 is also engaged in mine decommissioning and environmental
services through its Closed Mines group (formerly Denison
Environmental Services), which manages Denison's Elliot Lake
reclamation projects and provides post-closure mine care and
maintenance services to a variety of industry and government
clients.
For more information, please contact
David Cates
(416) 979-1991 ext 362
President and Chief Executive
Officer
Sophia Shane
(604) 689-7842
Investor Relations
Follow Denison on Twitter
@DenisonMinesCo
Qualified Persons
The technical information contained in this release has been
reviewed and approved by Mr. David Bronkhorst, P.Eng, Denison's
Vice President, Operations, who is a Qualified Person in accordance
with the requirements of NI 43-101.
Certain information contained in this news 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 news release contains forward-looking
information pertaining to the following: the planned scope,
elements, and objectives of the 2021 ISR field programs, including
the results of the column leach tests, including head grade and
reagent usage results and estimates; other evaluation activities,
including plans for future lixiviant tests and those activities
connected with the EA process; the results of the PFS and
expectations with respect thereto; expectations with respect to
phased development, and the estimates of reserves in each such
phase; other development and expansion plans and objectives,
including plans for a feasibility study; and expectations regarding
its joint venture ownership interests and the continuity of its
agreements with its partners.
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 modelling and assumptions upon which the work plans
are based may not be maintained after further testing or be
representative of actual conditions within the Phoenix deposit. In
addition, Denison may decide or otherwise be required to
discontinue its field test activities or other testing, evaluation
and development work at Wheeler River if it is unable to maintain
or otherwise secure the necessary resources (such as testing
facilities, capital funding, regulatory approvals, etc.) or
operations are otherwise affected by COVID-19 and its potentially
far-reaching impacts. Denison believes that the expectations
reflected in this forward-looking information are reasonable but no
assurance can be given that these expectations will prove to be
accurate and results may differ materially from those anticipated
in this forward-looking information. For a discussion in respect of
risks and other factors that could influence forward-looking
events, please refer to the factors discussed in Denison’s
Annual Information Form dated March 26, 2021 or subsequent
quarterly financial reports 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 news 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 news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news 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 Measured, Indicated and Inferred
Mineral Resources and Probable Mineral Reserves: This press
release may use the terms 'measured', 'indicated' and 'inferred'
mineral resources. United States investors are advised that while
such terms have been prepared in accordance with the definition
standards on mineral reserves of the Canadian Institute of Mining,
Metallurgy and Petroleum referred to in Canadian National
Instrument 43-101 Mineral Disclosure Standards ('NI 43-101') and
are recognized and required by Canadian regulations, these terms
are not defined under Industry Guide 7 under the United States
Securities Act and, until recently, have not been permitted to be
used in reports and registration statements filed with the United
States Securities and Exchange Commission ('SEC'). 'Inferred
mineral resources' have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the
basis of feasibility or other economic studies. 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. In addition, the terms "mineral
reserve", "proven mineral reserve" and "probable mineral reserve"
for the purposes of NI 43-101 differ from the definitions and
allowable usage in Industry Guide 7. Effective February 2019, the
SEC adopted amendments to its disclosure rules to modernize the
mineral property disclosure requirements for issuers whose
securities are registered with the SEC under the Exchange Act and
as a result, 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 under NI 43-101. However, information
regarding mineral resources or mineral reserves in Denison's
disclosure may not be comparable to similar