Stantec & ENGCOMP to lead PFS for Wheeler River uranium project

Denison Mines Corp has retained Stantec Consulting Inc and ENGCOMP Engineering and Computing Professionals Inc to lead and author the PFS for the Wheeler River project, which is the largest known, undeveloped high-grade uranium project in the infrastructure rich eastern portion of the Athabasca Basin region in northern Saskatchewan.

In addition to its in-house project development team, Denison has assembled a group of leading engineering and consulting firms, with mine development, metallurgical, and environmental experience applicable to the development of a large-scale uranium mining operation in northern Saskatchewan, to support the completion of the PFS for the Wheeler River project.

Stantec & ENGCOMP have been assigned responsibility for authoring the PFS in accordance with NI 43-101, including completion of the level of engineering design required to assemble a Class 4 capital cost estimate, project schedule, and an evaluation of infrastructure services and systems required for the development of a mining project in northern Saskatchewan. The work is planned to be managed primarily from Saskatoon and Sudbury, and is expected to leverage Stantec’s experience and track-record of executing all phases of mining studies and development, as well as ENGCOMP’s experience in Saskatchewan with heavy industrial projects in uranium and potash mining.

Hatch has been assigned responsibility for the mineral processing scope of the PFS, which is expected to include the development of an appropriate process design criteria for the recovery of uranium from the Gryphon and Phoenix deposits, as well as carrying out a capacity review of Denison’s 22.5% owned McClean Lake mill and developing various mineral processing inputs into the overall PFS. In completing this work, Hatch is expected to leverage its previous experience with the McClean Lake mill facility.

Throughout the course of the PFS, Denison Environmental Services (DES) has been assigned responsibility for managing the on-going environmental baseline data collection and regulatory aspects of the project to ultimately support the federal and provincial environmental assessment processes. DES is expected to leverage its experience working with the Canadian Nuclear Safety Commission, as a uranium facility operator for the Company’s reclaimed uranium mine sites in Elliot Lake, Ontario.

The purpose of the PFS is to establish the best economic options for the development of Wheeler River’s Gryphon and Phoenix deposits into a large scale, low cost uranium mining operation. In addition to focusing on project economics, the company’s development team is committed to addressing the challenge of sustainability – ensuring the Wheeler River project is able to deliver value to the company’s shareholders, while simultaneously providing economic and social benefits to impacted communities and minimizing its environmental footprint and impact.

On September 12, 2017, Denison announced a significant increase to the summer 2017 exploration drilling program at Wheeler River, which necessitated the continuation of exploration activities, in the vicinity of the Gryphon deposit, through to late October. On November 27, 2017, the company announced assay results from the 64 drill holes completed during the summer drilling program. The results were highlighted by 91% of drill holes intersecting significant uranium mineralization, leading to considerable geological interpretation and review ahead of the completion of an updated estimate of mineral resources for the Gryphon deposit. The updated estimate is expected to incorporate the results from an additional 141 drill holes completed at Gryphon since the maiden mineral resource estimate for the deposit was completed in late 2015. Work towards the completion of an updated estimate of mineral resources for the Wheeler River project is expected to continue during the first quarter of 2018.

The updated estimate of indicated mineral resources for the Wheeler River project is an important part of the PFS process. While the Company is currently targeting completion of the PFS by mid-2018, the timing of the PFS will ultimately be contingent on various factors, which includes the timing of the completion of the updated estimate of the mineral resources.

Wheeler River is a joint venture between Denison (60% and operator), Cameco Corp (30%), and JCU (Canada) Exploration Co Ltd (10%), and is host to the high-grade Gryphon and Phoenix uranium deposits discovered by Denison in 2014 and 2008, respectively.

On April 4, 2016, Denison announced the results of a PEA for Wheeler River, which considers the potential economic merit of co-developing the high-grade Gryphon and Phoenix deposits as a single underground mining operation. The PEA returned a base case pre-tax IRR of 20.4% based on the current long term contract price of uranium ($44.00/lb U3O8), and Denison’s share of estimated initial capital expenditures of C$336 million (C$560 million on 100% ownership basis). Exploration results from the subsequent drilling programs have not been incorporated into the resource estimate or the PEA.

As previously announced on January 10, 2017, Denison has entered into an agreement with its Wheeler River Joint Venture partners, Cameco and JCU, to fund 75% of Joint Venture expenses in 2017 and 2018 (ordinarily 60%) in exchange for an increase in Denison’s interest in the project to up to approximately 66%. Under the terms of the agreement, Cameco will fund 50% of its ordinary 30% share in 2017 and 2018, and JCU is expected to continue to fund its 10% interest in the project.

Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. In addition to its 60% owned Wheeler River project, Denison’s exploration portfolio consists of numerous projects covering approximately 347,000 ha in the Athabasca Basin region, including 327,000 ha in the infrastructure rich eastern portion of the Athabasca Basin. 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, 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 64.22% interest in the J Zone deposit and Huskie discovery on the Waterbury Lake property. Each of Midwest, Midwest A, J Zone and Huskie are located within 20 km of the McClean Lake mill.