{"id":382615,"date":"2020-11-17T06:33:15","date_gmt":"2020-11-17T11:33:15","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=382615"},"modified":"2020-11-17T06:33:15","modified_gmt":"2020-11-17T11:33:15","slug":"denison-reports-results-from-waterbury-pea-including-base-case-pre-tax-npv-of-177m-and-irr-of-39-1","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/denison-reports-results-from-waterbury-pea-including-base-case-pre-tax-npv-of-177m-and-irr-of-39-1\/","title":{"rendered":"Denison Reports Results From Waterbury PEA, Including Base Case Pre-Tax NPV of $177M and IRR of +39.1%"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n ISR MINING METHOD ESTIMATED TO PRODUCE USD$12.23<\/span> PER LB U3<\/sub>O8<\/sub> OPERATING COSTS <\/i>
\n <\/b>
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\n J ZONE DEPOSIT RENAMED TTHE HELDETH TU\u0301E\u0301 (“THT”) DEPOSIT <\/i>
\n <\/b>\n <\/p>\n

\n TORONTO<\/span>, Nov. 17, 2020<\/span> \/PRNewswire\/ –\u00a0Denison Mines Corp.<\/b>\u00a0(“Denison” or the “Company”) (TSX: DML) (NYSE American: DNN)\u00a0is pleased to announce the successful completion of an independent Preliminary Economic Assessment (“PEA”) for the Waterbury Lake Property (“Waterbury”) evaluating the potential use of the in-situ recovery (“ISR”) mining method at the Tthe Heldeth Tu\u0301e\u0301\u00a0(see below, formerly named J Zone) deposit (the “Project”) with associated processing at Denison’s 22.5% owned McClean Lake mill.\u00a0View PDF version<\/a><\/p>\n

The PEA was prepared by Engcomp Engineering & Computing Professionals (“Engcomp”) of Saskatoon<\/span> and demonstrates robust economics for a small-scale Athabasca<\/span> Basin ISR uranium mining project \u2013 including low initial capital costs, low operating costs and globally competitive all-in costs, as follows: <\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
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\n Mine life<\/span>\n <\/p>\n<\/td>\n

\n

\n
\n ~ 6 years (Avg. ~1.6 million lbs U3<\/sub>O8<\/sub> per year)<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n Projected mine production (1)<\/sup><\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 9.7 million lbs U3<\/sub>O8<\/sub> (177,664 tonnes at 2.49%)<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n Average cash operating costs<\/span>\n <\/p>\n<\/td>\n

\n

\n
\n USD$12.23 ($16.27) per lb U3<\/sub>O8<\/sub><\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n Initial capital costs (2)<\/sup><\/span>\n <\/p>\n<\/td>\n

\n

\n
\n $112 million<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n Base case pre-tax IRR (3)<\/sup><\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 39.1%<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n Base case pre-tax NPV8% <\/sub>(3)<\/sup><\/span>\n <\/p>\n<\/td>\n

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\n
\n $177 million<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n Base case price assumption<\/span>\n <\/p>\n<\/td>\n

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\n
\n UxC spot price(4)<\/sup> (Avg. USD$53.59 per lb U3<\/sub>O8<\/sub>)<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Operating profit margin (5)<\/sup><\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 77% at USD$53.59 per lb U3<\/sub>O8<\/sub><\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n All-in cost (6)<\/sup><\/span>\n <\/p>\n<\/td>\n

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\n
\n USD$24.93 ($33.16) per lb U3<\/sub>O8<\/sub><\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

\n\n\n\n\n\n\n\n
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\n
\n (1)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

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\n
\n See Deposit, Geology & Projected Mine Plan section below for additional information regarding projected mine production. Scheduled tonnes and grade do not represent an estimate of mineral reserves.<\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n
\n (2)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

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\n
\n Initial capital costs exclude $20.1 million of estimated pre-construction Project evaluation and development costs. <\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n
\n (3)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n NPV and IRR are calculated to the start of pre-production activities for the THT operation. <\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n
\n (4)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Spot price forecast is based on “Composite Midpoint” scenario from UxC’s Q3’2020 Uranium Market Outlook (“UMO”) for the years 2028 to 2033, and is stated in constant (not-inflated) dollars.<\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n
\n (5)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Operating profit margin is calculated as uranium revenue less operating costs, divided by uranium revenue.\u00a0 Operating costs exclude all royalties, surcharges and income taxes.<\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n
\n (6)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n All-in cost is estimated on a pre-tax basis and includes all project operating costs and capital costs, excluding project evaluation and development costs, divided by the estimated number of finished pounds U3<\/sub>O8<\/sub>\u00a0produced.<\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Denison is also pleased to announce the re-naming of the J Zone deposit to the “Tthe Heldeth Tu\u0301e\u0301”\u00a0(“THT”) deposit \u2013 pronounced “Tey Hel-deth Tway<\/span>“. The Ya’thi N\u00e9n\u00e9 Land and Resource Office (“YNLR”), working together with Denison, reviewed the Conceptual Mining Study (“Concept Study”) prepared by Denison for the J Zone deposit prior to initiation of the PEA (see news release dated July 28, 2020<\/span>). The YNLR provided valuable early feedback related to the Project’s next steps, and recommended the use of a Den\u00e9 name for the deposit that would recognize and respect the connection of the Athabasca Denesu\u0328\u0142ine\u0301 to the land where the deposit is located.<\/p>\n

\n This press release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated November 13, 2020<\/span> to its short form base shelf prospectus dated April 2, 2020<\/span>.<\/i>\n <\/p>\n

\n David Cates<\/span>, President and CEO of Denison, commented: <\/p>\n

\n “The Waterbury PEA further demonstrates the potential for the ISR mining method to change Canada’s<\/span> global competitiveness in the uranium mining sector \u2013 without requiring the discovery and development of massive-scale uranium mines. The selection of the ISR mining method for the <\/i>
\n Tthe Heldeth Tu\u0301<\/i>e\u0301 deposit has transformed our expectations for the Project \u2013 generating robust preliminary financial results with comparatively modest upfront capital costs and positioning the Project as Denison’s second ISR amenable development asset with a cost profile that is highly competitive amongst undeveloped uranium mining assets globally.”<\/i><\/p>\n

\n David Bronkhorst<\/span>, VP Operations of Denison further added: <\/p>\n

\n “<\/i>
\n Denison’s technical team successfully modelled the application of the ISR mining method to the Tthe Heldeth Tu\u0301e\u0301<\/i>\u00a0deposit in the internal concept study and the preliminary results have now been validated with the completion of an independent NI 43-101 compliant PEA.\u00a0Denison’s plan for the Project includes a ‘freeze wall’ design adapted from the ‘freeze dome’ outlined for the Phoenix<\/span> deposit in the Wheeler River Pre-Feasibility Study (‘Wheeler PFS’). The freeze wall design allows for the containment of a smaller area and a significant reduction in up front capital costs, as compared to the ‘freeze dome’.\u00a0Additionally, the freeze wall is expected to offer environmental advantages by providing containment of the ISR mining operation from the depth of the uranium deposit all the way to surface. With the positive results of the freeze wall design demonstrated in the Waterbury PEA, Denison is also evaluating the potential benefits of a freeze wall (rather than freeze dome) for use at Wheeler River’s Phoenix<\/span> deposit.”<\/i><\/p>\n

Waterbury is owned by the Waterbury Lake Uranium Limited Partnership (“WLULP”), of which Denison Waterbury Corp. (a wholly-owned subsidiary of Denison) owns 66.90% and Korea Waterbury Lake Uranium Limited Partnership (“KWULP”) owns 33.10%. KWULP is comprised of a consortium of investors, in which Korea Hydro & Nuclear Power (“KHNP”) holds a majority position. KHNP is headquartered in Gyeongju, South Korea<\/span> and is the country’s largest electrical power generation company, operating 24 nuclear power reactors and supplying approximately one-quarter of the country’s electricity. KHNP is also a significant shareholder in Denison.<\/p>\n

The PEA is prepared on a Project (100% ownership) and pre-tax basis, as each of the partners to the WLULP are subject to different tax and other obligations. After-tax results attributable to Denison’s ownership interest are provided below under the heading “Indicative Denison Post-Tax Results”. All amounts are in Canadian dollars unless otherwise noted.<\/p>\n

The PEA is a preliminary analysis of the potential viability of the Project’s mineral resources, and should not be considered the same as a Pre-Feasibility or Feasibility Study, as various factors are preliminary in nature. There is no certainty that the results from the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.<\/p>\n

\n
\n Preliminary Economic Assessment Highlights<\/i>
\n <\/b>\n <\/p>\n