Orano Canada and Denison Announce JV Approval to Restart McClean Lake Mining Operations
- The joint venture has approved the restart of uranium mining operations at the McClean Lake Joint Venture.
- The patented Surface Access Borehole Resource Extraction (SABRE) mining method will be used for the mining operations.
- Approximately 800,000 lbs U3O8 are targeted for production in 2025, with potential additional production from other deposits in the following years.
- A budget of $7 million has been approved for 2024 for preparations necessary to ready the existing SABRE mining site and equipment for continuous commercial operations.
- None.
Insights
The announcement of the restart of uranium mining operations at the McClean Lake Joint Venture (MLJV) using the SABRE method is a strategic move that is likely to influence the supply dynamics in the uranium market. The projected production figures suggest a substantial increase in uranium output, with an estimated 800,000 lbs of U3O8 targeted for 2025 and potential additional production of approximately 3,000,000 lbs from 2026 to 2030. This could position Orano Canada and Denison Mines Corp. as significant players in the nuclear energy sector, which is experiencing renewed interest as countries seek carbon-neutral energy sources.
However, the capital expenditure of $7 million for preparatory work in 2024 indicates a conservative investment approach, reflecting the volatile nature of uranium prices and the need for careful financial planning. Investors should monitor the uranium market's response to increased supply, as well as the execution of the MLJV's operational plans, to gauge the potential impact on Orano's and Denison's financial performance.
The utilization of the SABRE mining method, a patented technology, highlights a competitive advantage for the MLJV. The method's ability to selectively extract high-grade uranium ore from surface could result in lower operational costs and higher efficiency compared to traditional underground mining. As global energy policies increasingly favor low-carbon sources, the demand for uranium is expected to rise and the MLJV's innovative approach could give it a favorable position in the market.
Investors should consider the potential for long-term contracts and partnerships with utilities, which could provide stable revenue streams for Orano Canada and Denison Mines Corp. Additionally, the impact on the stock market will likely be influenced by the strategic significance of uranium for energy security and the role of nuclear power in the transition to cleaner energy.
From a financial perspective, the restart of operations at McClean Lake is an investment in future revenue streams for both Orano Canada and Denison Mines Corp. The long-term R&D investment in the SABRE method could translate into a lower cost base and higher margins, assuming uranium prices remain favorable. The market will be looking at the price elasticity of uranium and how increased supply from MLJV will interact with global demand.
Furthermore, the timing of the restart coincides with a broader market trend towards decarbonization, where nuclear energy is gaining traction as a stable and clean energy source. This macroeconomic trend could benefit Orano Canada and Denison Mines Corp. by creating a more favorable pricing environment for uranium, thereby potentially enhancing shareholder value in the long term.
Mining is planned to commence at the McClean North deposit in 2025, with 2024 activities expected to focus on preparations necessary to ready the existing SABRE mining site and equipment for continuous commercial operations, as well as the installation of eight pilot holes for the first mining cavities planned for excavation. The approved budget for this work in 2024 is
Approximately 800,000 lbs U3O8 (
Jim Corman, Orano Canada's President and Chief Executive Officer, said, "Our current ability to capitalize on the strengthening uranium and nuclear markets is the result of a long-term investment in R&D within Orano and the MLJV to secure continued activities at the McClean Lake operation well into the future. The groundwork we do over the course of 2024, is expected to put the MLJV in position to see SABRE in action and to commence production in 2025. It is anticipated that the McClean Lake mill will have sufficient capacity to process this ore, while continuing with committed planned production from Cigar Lake. It's an exciting time for employees, partners, and the industry as we return to a focus on growth."
David Cates, Denison's President and Chief Executive Officer, commented, "The restart of uranium mining at McClean Lake is a notable milestone for the MLJV and Denison. Mining at McClean Lake was suspended in 2008 in response to declining uranium prices. During the interim 15 years, the MLJV invested in the development of a proprietary mining method designed to selectively extract high-grade
We would like to thank our colleagues at Orano Canada for their efforts to develop the SABRE method to a commercial-ready state, which has allowed for the joint venture to make the decision to resume production at McClean Lake."
SABRE is the culmination of a mining equipment invention and development initiative that began in 2004 and concluded in 2021 with the completion of multi-year mining test program that successfully excavated approximately 1,500 tonnes of high-value ore. It is a non-entry, surface-based mining method that uses a high-pressure water jet placed at the bottom of a drill hole to excavate a mining cavity. The cuttings from the excavation process are then air lifted to surface, separated, and stockpiled. SABRE is viewed as an innovative mining method that has the potential to allow for economic access to relatively small high-grade orebodies in the
SABRE is unique in that the mining method can be selective and scalable, which has the potential to provide superior flexibility when compared to conventional mining methods and is thus ideally suited to ever changing uranium market conditions – with an expected production ramp up of months instead of years. The SABRE method has environmental advantages when compared to conventional open pit or underground mining methods as a result of its less intrusive nature and smaller surface footprint. Reduced water usage and power consumption also contribute to important reductions in greenhouse gas emissions and improved sustainability. Additionally, as a non-entry mining method, radiological exposure for mine workers is minimized.
For additional information about the SABRE mining test completed in 2021, please refer to the Orano Canada and the Denison joint news release dated November 3, 2021.
The McClean Lake property is located within the eastern part of the Athabasca Basin region in northern
Additional information about the McClean North and Caribou deposits can be found in the technical reports entitled "Technical Report on the Mineral Resource Estimate for the McClean North Uranium Deposits,
For Orano Canada, the technical information in this release has been reviewed and approved by Mr. Louis-Pierre Gagnon, P. Eng., Head of Mining Engineering, Orano Mining who is a Qualified Person in accordance with the requirements of Canadian National Instrument 43-101 Mineral Disclosure Standards ("NI 43-101").
For Denison, the technical information contained in this release has been reviewed and approved by Mr. Chad Sorba, P. Geo., Denison's Vice President Technical Services & Project Evaluation, and Mr. Andrew Yackulic, P. Geo., Denison's Vice President Exploration, each of whom is a Qualified Person in accordance with the requirements of NI 43-101.
Headquartered in
Orano Canada Inc. is a subsidiary of the multinational Orano group. As a recognized international operator in the field of nuclear materials, Orano delivers solutions to address present and future global energy and health challenges. Its expertise and mastery of cutting-edge technologies enable Orano to offer its customers high value-added products and services throughout the entire fuel cycle. Every day, the Orano group's 17,000 employees draw on their skills, unwavering dedication to safety and constant quest for innovation, with the commitment to develop know-how in the transformation and control of nuclear materials, for the climate and for a healthy and resource-efficient world, now and tomorrow.
Visit Orano at www.oranocanada.com or follow us on LinkedIn, Facebook and Twitter: @oranocanada
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
Learn more at www.denisonmines.com or follow Denison on X (formerly Twitter): @DenisonMinesCo.
Certain information contained in this press release constitutes "forward-looking information", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar 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 press release contains forward-looking information pertaining to the following: the anticipated site preparations and mining activities and estimates for the timing and budget thereof; the ability to successfully deploy the SABRE mining method and achieve the objectives of the MLJV; the environmental and safety benefits of the SABRE mining method; the targeted production at McClean North from 2025 to 2030 and other potential targets for production; and Denison's percentage interest in its properties and its plans and agreements with its joint venture 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, performance or achievements of Denison to be materially different from those expressed or implied by forward-looking statements. Denison and Orano Canada believe 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 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 for Denison, please refer to the factors discussed in Denison'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. Neither Denison nor Orano Canada undertakes 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 their respective expectations except as otherwise required by applicable legislation.
This news release may use the terms 'measured', 'indicated' and 'inferred' mineral resources.
Effective February 2019, the United States Securities and Exchange Commission ("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
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SOURCE Denison Mines Corp.
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