EX-99.1
2
a2021-001dmcdenisonannoun.htm
PRESS RELEASE DATED FEBRUARY 8, 2021
a2021-001dmcdenisonannoun
Exhibit 99.1
Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
PRESS
RELEASE
DENISON ANNOUNCES RAMP-UP OF
WHEELER RIVER EVALUATION ACTIVITIES IN 2021
Toronto, ON – February 8,
2021. Denison Mines Corp. (“Denison” or the
“Company”) (DML: TSX, DNN: NYSE American) is pleased to
announce its 2021 evaluation program plans for the Company’s
90% owned Wheeler River Uranium Project (“Wheeler
River” or the “Project”), including additional
field testing activities to support the further de-risking of the
application of the In-Situ Recovery (“ISR”) mining
method at the high-grade Phoenix uranium deposit
(“Phoenix”).
The Wheeler River Joint Venture
(“WRJV”) has adopted an approach to advancing the
Project whereby completion of a formal Feasibility Study
(“FS”) would be coordinated with the submission of a
final Environmental Impact Statement (“EIS”). This
approach respects the interactive nature of the Environmental
Assessment (“EA”) consultation process, allowing for
the integration of outcomes
from environmental assessment, community consultation, and project
design efforts. Our current objectives target initiation of the
formal FS process in late 2021 and the submission of a draft EIS in
early 2022.
In
support of these objectives, the WRJV approved a $24.0 million
evaluation budget for 2021 (100% basis), which is highlighted by
the resumption of the EA process, as well as the advancement of
engineering studies, metallurgical testing, and field programs.
Denison’s share of the 2021 evaluation budget for Wheeler
River, net of operator fee recoveries, is $19.4
million.
This press release constitutes a "designated news release" for the
purposes of the Company's prospectus supplement dated November 13,
2020 to its short form base shelf prospectus dated June 2,
2020.
Highlights from Wheeler River 2021 Evaluation Program
●
Resumption of EA
process: Activities planned to
support the EA process in 2021 include the progression of
engagement activities, adapted to reflect COVID-19 protocols, to
facilitate information sharing with interested parties. Advancing
the EA process is also expected to involve the completion of
various third-party technical studies and Provincial and Federal
regulatory engagement ahead of the submission of a draft EIS, which
is currently targeted for early 2022. Significant work programs in
support of the EA process resumed in January.
●
Advancement of ISR field
programs: The installation of a
5-spot Test Pattern (“Test Pattern”), consisting of
commercial-scale wells (“CSWs”), is planned for
Phoenix. The Test Pattern is expected to allow for the further
evaluation and confirmation of the ore body’s hydrogeological
characteristics. Installation of the Test Pattern is also expected
to support the finalization of the production well design pattern,
confirm cost estimates and designs for the CSWs, validate
permeability enhancement options, and provide the necessary
datasets for permitting and set-up of a lixiviant test in 2022. The
lixiviant test is expected to be a key de-risking milestone for the
Project – as it is intended to confirm technical feasibility,
as well as verify the permeability, leachability, and containment
parameters needed for the successful application of the ISR mining
method at Phoenix. The 2021 field program is fully permitted, with
all approvals received from the provincial government to commence
work on site.
●
Continuation of detailed ISR
metallurgical testing: Extensive laboratory studies replicating the ISR
process flowsheet are planned to test and optimize the mineral
processing aspects of the Phoenix operation. Studies are expected
to include additional core leach tests followed by uranium-bearing
solution (“UBS”) preparation, through column leaching,
to allow for bench-scale tests planned to simulate each unit of
operation in the process plant.
●
Progression of engineering
activities: Desktop and field
investigations are planned to finalize specific Project details
necessary for the EA and engineering inputs required to formally
initiate the FS. Areas of investigation are expected to include
site layout design and earthworks updates, electrical power
studies, borrow pit investigation, geotechnical analysis, final ISR
well designs and decommissioning plans.
David Cates,
Denison’s President & CEO, commented, “Our Saskatoon-based
technical team has made considerable progress towards de-risking
the use of the ISR mining method at Phoenix since the
Pre-Feasibility Study for Wheeler River was released in late 2018.
The Company is well-funded for 2021, and has developed an ambitious
evaluation program, which reflects a significant ramp-up of our
technical and environmental activities. Our 2021 plans are focused
on achieving Denison’s goals of initiating a formal FS by
late 2021 and submitting a draft EIS in early 2022 – the
completion of which are both important steps necessary for the
Company to make a future development decision for
Phoenix.”
David Bronkhorst,
Denison’s Vice President Operations, added, “Despite the
challenges of the COVID-19 Pandemic, Denison’s technical team
made significant progress de-risking critical elements of the
Phoenix ISR project in 2020 – notably through the independent
confirmation of ‘proof of concept’, completion of
another productive ISR field program, and the decision to adopt a
freeze wall design for ISR mining at Phoenix. Building on these
successes, we have developed a plan for 2021 that is designed to
result in significant progress towards further de-risking the ISR
mine plan for Phoenix – including the installation of a
5-spot Test Pattern, and the completion of various detailed
engineering and metallurgical test work
programs.”
Resumption of Environmental Assessment process
The
Environmental Assessment is a key element of the Project’s
critical path. EA related activities are expected to include
technical assessments and reviews associated with the preparation
of the draft EIS. The technical assessments will evaluate the
significance of the Project’s potential effects on the
biophysical environment, as well as human health and cultural
heritage. Furthermore, a major component of the EIS will address
both the beneficial and potentially adverse socio-economic and land
use effects of the Project.
In
connection with advancing the EA process, activities in 2021 are
also planned to include the progression of engagement efforts
(adapted to reflect COVID-19 protocols) to facilitate information
sharing with interested parties, and the continued collection of
specific baseline environmental data to provide added continuity
and integrity to the information collected through each phase of
the project.
Advancement of ISR field programs
Additional
field and laboratory work is planned in 2021 to further increase
confidence and reduce risk in the application of the ISR mining
method at Phoenix. The main objectives of the 2021 ISR field
program are to further evaluate, confirm and model the
hydrogeological characteristics of the Phoenix ore body, finalize
the production well design pattern, confirm cost estimates and
designs for CSWs, validate permeability enhancement options, and
provide the necessary datasets for the permitting and preparation
of a lixiviant test in 2022. The lixiviant test is expected to be a
key milestone in the de-risking process – intended to confirm
technical feasibility and verify the permeability, leachability and
containment parameters needed for the successful application of the
ISR mining method at Phoenix. The 2021 field program is fully
permitted, with all approvals received from the provincial
government to commence work.
The
2021 ISR field program is expected to have the following key
components and objectives:
●
Test
Pattern: Installation of a
5-spot Test Pattern in the area identified as Phase 1 of the
planned development sequence for Phoenix (see Denison’s news
release dated Dec. 1, 2020). The Test Pattern will consist of five
new CSWs and is designed to evaluate hydraulic conductivities and
connections between wells (including GWR-032) spaced from 5 to 30
meters apart (see Figure 1). Permeability enhancement tools will be
utilized to engineer a minimum level of hydrogeologic conductivity
between the variably spaced wells. Subsequent conductivity will
depend on the natural permeability of the ore body via the
fracture/structure network. The variable spacing approach will
provide valuable data that will allow for the continued evaluation
of the natural hydrogeological conditions of the deposit and our
ability to effectively engineer minimum levels of hydraulic
conductivity, at different well spacing distances, using
permeability enhancement tools. The data will be critical in
optimizing the final wellfield design. Additionally, the Test
Pattern will help finalize construction sequencing, cost estimates,
and schedule for the installation of CSWs at
Phoenix.
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
mineral reserves represent approximately 30% of the 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 estimated within the boundaries of
Phase 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 key assumptions, parameters and methods used to estimate
the mineral reserves herein remain unchanged.
●
Hydrogeological
Tests: Hydrogeological pump and
injection tests will occur before and after each CSW installation
and will evaluate the effectiveness of permeability enhancement on
an individual well basis within the deposit test area. After the
hydrogeological tests are completed on individual wells, multi-day
pump and injection tests and additional hydrogeological tests will
be performed on the collective Test Pattern. These tests are
intended to assess the Test Pattern’s total permeability, and
support an ongoing assessment of the ability of various
permeability enhancement tools to normalize the varying levels of
permeability associated with the natural fracture/structure network
of the deposit. A full-scale tracer test is also planned for 2021,
which is expected to support an assessment of the arrival time from
a centre well (“injection well”) to the outer ring
wells (“recovery wells”). The test is expected to
establish breakthrough times for each CSW and confirm sub-surface
pathways, allowing for a more complete understanding of the
hydrogeologic elements expected throughout Phase 1. All test work
in 2021 will be conducted using site groundwater. Following the
field tests, detailed hydrogeological and geochemical modelling of
the test data will be carried out by various Qualified Persons
(“QPs”).
The
hydrogeologic test work planned for 2021 is also expected to
provide the necessary datasets for the design and permitting of a
lixiviant test in 2022, which is expected to make use of the same
Test Pattern installed during 2021.
●
Monitoring Wells: The field program includes the
installation of 11 monitoring wells (“MWs”) in the
Phase 1 area (see Figure 1). The MWs will surround the Test Pattern
on all sides and above the ore zone. Sensors installed at varying
depths, from 30 to 450 meters, will monitor pressure changes and
the distribution of fluid flow above, along strike, and below the
ore body during the various hydrogeological tests, pump and
injection tests, and during the full-scale Test Pattern tracer
test. The MWs will also help to define sub-aquifers and confirm the
basement units as suitable aquitards for the purposes of finalizing
the freeze wall design.
Continuation of detailed ISR metallurgical testing
As
the Project advances towards the FS and as the EA progresses,
advanced metallurgical work will be conducted to verify and
optimize the metallurgical processing elements proposed for the
Phoenix ISR mining operation. This work will support plant designs
for the FS, and the technical assessments required for the EA, by
providing accurate process flow diagrams, mass balance and waste
stream information for all unit operations.
Studies
are expected to include additional core leach tests (see Denison
news release dated Feb. 19, 2020) to verify the ISR mining process
and the overall rate of recovery expected from the deposit. The
tests involve the use of undisturbed core samples to assess
metallurgical recovery while simulating in-ground conditions. The
results of these tests are intended to confirm the lixiviant
characteristics and the UBS head grade anticipated for Phoenix,
thus facilitating the definition of the lixiviant composition
required for the future lixiviant test and informing the
anticipated UBS characteristics.
Following
the core leach tests, up to 3,000 litres of UBS will be generated
through column leaching – with the resulting solution
utilized for a bench-scale testing program that is expected to
consist of laboratory tests where each unit operation expected in
the process plant will be simulated.
Progression of engineering activities
Numerous
engineering activities are planned for 2021 – focusing on
obtaining and finalizing the specific project details necessary to
support the EA process and the formal initiation of the FS. These
studies include overall site layout and earthworks updates,
electrical power studies to inform back-up generator and switchgear
selection, borrow pit location selection, geotechnical analyses,
final ISR well design, and decommissioning plans.
The
results of the 2021 field program are expected to inform a decision
from the WRJV regarding the formal initiation of a FS during the
second half of 2021. If approved, transitioning into the FS will
mark the initiation of further engineering work in the areas of
surface infrastructure, plant design, and ground
freezing.
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 NI 43-101 Technical Report titled
"Pre-feasibility Study for the Wheeler River Uranium Project,
Saskatchewan, Canada" dated October 30, 2018 with an effective date
of September 24, 2018. A copy of this report is available on
Denison's website and under its profile on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov/edgar.shtml.
Denison 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. In addition to the Wheeler River project,
Denison's Athabasca Basin exploration portfolio consists of
numerous projects covering over 250,000 hectares. Denison's
interests in the Athabasca Basin also include a 22.5% ownership
interest in the McClean Lake joint venture ("MLJV"), which includes
several uranium deposits and the McClean Lake uranium mill, which
is currently processing ore from the Cigar Lake mine under a toll
milling agreement, plus a 25.17% interest in the Midwest and
Midwest A deposits, and a 66.9% interest in the J Zone and Huskie
deposits on the Waterbury Lake property. Each of Midwest, Midwest
A, J Zone and Huskie are located within 20 kilometres of the
McClean Lake mill.
Denison is 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.
Denison is also the manager of Uranium Participation Corp., a
publicly traded company which invests in uranium oxide and uranium
hexafluoride.
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 evaluation program, including
the EA process, ISR field programs, metallurgical testing and
engineering activities; the results of the PFS and expectations
with respect thereto; 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 the 2021 Field Test 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 13, 2020 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 information made public
by United States companies.
Figure 1: Plan Map Showing Location of Phoenix Deposit (Phase 1)
– ISR Test Pattern