Denison Reports Financial and Operational Results for Q2 2023
- The Feasibility Study for the Wheeler River Phoenix deposit demonstrated robust economics, with a base case pre-tax NPV (8%) of $2.34 billion, representing a 150% increase from the 2018 Pre-Feasibility Study.
- Denison is well funded with over $235 million in working capital and investments at the end of Q2 2023.
- The Phoenix FS plans are aligned with environmental criteria and the project is on track for a final investment decision.
- The cost update to the 2018 PFS for the Gryphon deposit confirmed the project remains positioned among the lowest-cost uranium mines in the world, with a base case pre-tax NPV (8%) of $1.43 billion.
- None.
David Cates, President and CEO of Denison commented, "During the second quarter, Denison achieved a further notable milestone associated with the advancement of our flagship Wheeler River Project ('Wheeler River') with the completion of (i) a highly successful Feasibility Study ('Phoenix FS') evaluating the use of In-Situ-Recovery ('ISR') mining for the high grade
As outlined in the Phoenix FS, Denison has successfully completed several years of technical de-risking, which has cemented
Global support for the role of nuclear power in the clean energy transition continues to grow and uranium buyers are increasingly prioritizing geopolitical stability. Denison is well funded, with over
Highlights
- Feasibility Study for Wheeler River Phoenix deposit yields significant increase in economic results
In June 2023, Denison released the results of the Phoenix FS completed for ISR mining of
- Base case pre-tax NPV (
8% ) of ($2.34 billion 100% ownership-basis) representing a150% increase in the base case pre-tax NPV8% forPhoenix from the 2018 Pre-Feasibility Study ('2018 PFS'). - Very robust base case pre-tax Internal Rate of Return ('IRR') of
105.9% . - Adjusted base case after-tax NPV
8% of ($1.56 billion 100% basis) and IRR of90.0% – with Denison's effective95% interest in the project equating to an adjusted base case after-tax NPV8% of .$1.48 billion - Base case pre-tax and after-tax (adjusted) payback period of 10 months – equating to a reduction of 11 months for the pre-tax payback period from the 2018 PFS.
- Optimized production profile, based on ISR mine planning efforts evaluating production potential for individual well patterns – resulting in an increase to the planned rate of production by approximately
43% during the first five years of operations. - Estimated pre-production capital costs of under
($420 million 100% basis), yielding an impressive base case after-tax (adjusted) NPV to initial capital cost ratio in excess of 3.7 to 1. - Robust economics that easily absorb cost-inflation and design changes impacting both operating and capital costs, confirming
Phoenix 's position with estimated cash operating and all-in costs expected to be amongst the lowest-cost uranium mines in the world. - Phoenix FS plans aligned and costed to meet or exceed environmental criteria expected to be required by the ongoing regulatory approval process.
- Updated mineral resource estimate, reflecting the results of 70 drill holes completed in support of ISR de-risking and resource delineation activities, which has upgraded 30.9 million pounds U3O8 into measured mineral resources, and increased the average grade of the Zone A high-grade domain. This zone is now estimated to contain 56.3 million pounds U3O8 in Measured and Indicated mineral resources at an average grade of
46.0% U3O8. - Upgraded 3.4 million pounds U3O8 into Proven mineral reserves, representing the equivalent of
85% of production planned during the first calendar year of operations. - Completion of Phoenix ISR De-Risking and Transition to Engineering Design
The Phoenix FS reflects independent third-party validation of the selection of the ISR mining method for
With technical de-risking of the project substantially complete, front-end engineering design efforts to support the advancement of the planned
- Cost update to the 2018 PFS for Wheeler River Gryphon deposit confirms the project remains to be positioned amongst the lowest-cost uranium mines in the world
The scope of the Gryphon Update was targeted at the review and update of capital and operating costs. Mining and processing plans remain largely unchanged from the 2018 PFS aside from minor scheduling and construction sequencing optimizations. The key points include:
- Base case pre-tax NPV (
8% ) of ($1.43 billion 100% basis) is a148% increase in the base case pre-tax NPV8% for Gryphon from the 2018 PFS. - Strong base case pre-tax IRR of
41.4% . - Base case after-tax NPV
8% of ($864.2 million 100% basis) and IRR of37.6% – with Denison's effective95% interest in the project equating to a base case after-tax NPV8% of .$821.0 million - Base case pre-tax payback period of 20 months, and base case after-tax payback period of 22 months – equating to a reduction of 17 months for the pre-tax payback period from the 2018 PFS.
Importantly, Gryphon remains a highly valuable project that provides Denison with an additional source of low-cost potential production to deploy significant free cash flows expected from
About Denison
Denison Mines Corp. was formed under the laws of
Denison is a uranium exploration and development company with interests focused in the
Denison's interests in
Through its
Denison's exploration portfolio includes further interests in properties covering approximately 285,000 hectares in the
Denison is also engaged in post-closure mine care and maintenance services through its Closed Mines group, which manages Denison's reclaimed mine sites in the
Technical Disclosure and Qualified Person
The technical information contained in this press release has been reviewed and approved by Chad Sorba, P.Geo., Denison's Director, Technical Services, and Andy Yackulic, P.Geo., Denison's Director, Exploration, who are both Qualified Persons in accordance with the requirements of NI 43-101.
Further details of the Phoenix FS and Gryphon Update are provided in Denison's press release of June 26, 2023. The results of the Phoenix FS and Gryphon Update are also detailed in a technical report entitled "NI 43-101 Technical Report on the Wheeler River Project Athabasca Basin,
Non-GAAP Financial Measures
This release includes certain terms or performance measures commonly used in the mining industry that are not defined under International Financial Reporting Standards ("IFRS"). Such non-GAAP performance measures, including NPV, are included because the Company understands that investors use this information to determine the Company's ability to generate earnings and cash flows. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of mines to generate cash flows. Non-GAAP financial measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.
Cautionary Statement Regarding Forward-Looking Statements
Certain information contained in this press release constitutes 'forward-looking information', within the meaning of the applicable
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 results of the FS and the scope, objectives and interpretations of the technical de-risking process for the proposed ISR operation for the
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 FS 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 its evaluation activities and/or 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 the Company's Annual Information Form dated March 27, 2023 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.
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SOURCE Denison Mines Corp.
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