Denison Reports Results from Q3 2021

PR Newswire

TORONTO, Nov. 4, 2021

TORONTO, Nov. 4, 2021 /PRNewswire/ - Denison Mines Corp. ('Denison' or the 'Company') (TSX: DML) (NYSE American: DNN) today filed its Condensed Interim Consolidated Financial Statements and Management's Discussion & Analysis ('MD&A') for the quarter ended September 30, 2021. Both documents will be available on the Company's website at www.denisonmines.com or on SEDAR (at www.sedar.com) and EDGAR (at www.sec.gov/edgar.shtml). The highlights provided below are derived from these documents and should be read in conjunction with them. All amounts in this release are in Canadian dollars unless otherwise stated. View PDF version

David Cates, President and CEO of Denison commented, "Our recent In-Situ Recovery ('ISR') field test results reflect several years of progress made towards systematically de-risking the use of the ISR mining method at the high-grade Phoenix deposit -- culminating in the successful, and first of its kind, field test of a commercial-scale well pattern located in the expected first phase of the Phoenix orebody. Our accomplishments in the field and the laboratory have significantly increased our confidence in the use of the ISR mining method and support our landmark decision to advance the planned Phoenix ISR operation to the Feasibility Study design stage.

With increased interest in the uranium market and a recent lift in both spot and long-term uranium prices, we are encouraged that future utility customers are returning to the market and looking at Denison's Wheeler River project as a potentially viable source of reliable and low-cost future supply. Taken together with our effective 95% interest in Wheeler River and strong balance sheet, which, as of today, includes 2.5M lbs U(3) O(8) of physical uranium holdings acquired at a price under US$30/lb U(3) O(8) , we believe Denison is well positioned to become an intermediate supplier of choice in the second half of the decade at a time when market fundamentals are predicted to be favourable as a result of growing demand for uranium and a relative shortage of advanced low-cost uranium development assets in stable jurisdictions.

Our team is focused on advancing Phoenix in the coming months and years to realize on our vision of becoming the next new uranium producer in the Athabasca Basin region."

HIGHLIGHTS

   -- Successful completion of ISR field test activities at Phoenix  The 
      initial results of the 2021 ISR field test program ('2021 ISR Field 
      Test') completed at the Phoenix uranium deposit ('Phoenix') include (1) 
      the achievement of commercial-scale production flow rates consistent with 
      those assumed in the pre-feasibility study ('PFS') prepared for the 
      Wheeler River Project ('Wheeler River' or the 'Project') in 2018; (2) the 
      demonstration of hydraulic control of injected solution during the ion 
      tracer test; and (3) the establishment of breakthrough times between 
      injection and recovery wells, spaced 5 to 10 metres apart, that are 
      consistent with the hydrogeological model prepared by Petrotek 
      Corporation ('Petrotek') in 2020 demonstrating "proof of concept". In 
      addition, the Company completed the clean-up phase following the tracer 
      test, demonstrating the ability to remediate the commercial scale well 
      ('CSW') test pattern, reducing tracer concentrations to as low as 4% of 
      peak test levels, with eight days of remediation. 
   -- Advancement of Phoenix to feasibility study ('FS') stage and selection 
      Wood PLC as independent lead authorIn September 2021, the Wheeler River 
      Joint Venture ('WRJV') approved the initiation of an independent FS for 
      the ISR mining operation proposed for Phoenix. The completion of the FS 
      is a critical step in the progression of the project and is intended to 
      advance de-risking efforts to the point where the Company and the WRJV 
      will be able to make a definitive development decision. The Company also 
      selected leading global consulting and engineering firm Wood PLC to lead 
      and author the FS in accordance with Canadian Securities National 
      Instrument 43-101 ('NI 43-101'). 
   -- Initiated exploration drilling programs at Wheeler River and Moon Lake 
      South In early September, Denison's exploration team initiated diamond 
      drilling exploration programs at Wheeler River, and the Moon Lake South 
      project. Approximately 6,500 m of diamond drilling is planned for Wheeler 
      River, with regional exploration drilling expected to be focused on 
      expanding mineralization encountered in 2020 at K West and M Zone, plus 
      additional exploration drilling at Phoenix Zone A to test the extents of 
      high-grade mineralization encountered in drill hole GWR-045. Moon Lake 
      South is a Denison-operated joint venture with CanAlaska Uranium Ltd., in 
      which Denison holds a 75% interest. Drilling planned for Moon Lake South 
      is expected to consist of 2,400 metres focused on testing geophysical 
      targets. 
   -- Completed acquisition of 50% of JCU (Canada) Exploration Company, Limited 
      ('JCU') for $20.5 million In August 2021, Denison completed the 
      acquisition of 50% of JCU from UEX Corporation ('UEX') for cash 
      consideration of $20.5 million, following UEX's acquisition of 100% of 
      JCU from Overseas Uranium Resources Development Co., Ltd. for $41 
      million. JCU holds a portfolio of 12 uranium project joint venture 
      interests in Canada, including a 10% interest in Wheeler River, a 30.099% 
      interest in the Millennium project (Cameco Corporation 69.901%), a 
      33.8123% interest in the Kiggavik project (Orano Canada Inc. 66.1877%), 
      and a 34.4508% interest in the Christie Lake project (UEX 65.5492%). 
   -- Completed the sale of shares and warrants of GoviEx Uranium Limited 
      ('GoviEx) for proceeds of up to $41,600,000In October, the Company sold, 
      by private agreement, 32,500,000 common shares of GoviEx, held by Denison 
      for investment purposes, and 32,500,000 common share purchase warrants, 
      entitling the holder of the warrant to acquire one additional common 
      share of GoviEx owned by Denison at an exercise price of $0.80 for a term 
      of up to 18 months. Denison received gross proceeds of $15,600,000 on the 
      sale of the shares and warrants and continues to hold 32,644,000 common 
      shares of GoviEx. If the GoviEx warrants are exercised in full, Denison 
      will receive further gross proceeds of $26,000,000 and will transfer a 
      further 32,500,000 GoviEx common shares to the warrant holders. 
   -- Recorded significant mark-to-market fair value gains on the Company's 
      long-term investments in uranium  During the nine months ending September 
      30, 2021, the Company acquired 2,400,000 pounds of uranium at a weighted 
      average cost of $36.59 (US$29.62) per pound U3O8 to be held as a 
      long-term investment. Due to significant activity in the uranium spot 
      market in the third quarter, the spot price appreciated from US$32.10 per 
      pound U3O8 to US$43.00 per pound U3O8 resulting in mark-to-market gains 
      for the three months ended September 30, 2021 of $36,138,000 on these 
      uranium investments. 

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 and is a joint venture between Denison and Denison's 50%-owned JCU. Denison is the operator of the project and holds an effective 95% ownership interest. The project is host to the high-grade Phoenix and Gryphon uranium deposits, discovered by Denison in 2008 and 2014, respectively, estimated to have combined Indicated Mineral Resources of 132.1 million pounds U(3) O(8) (1,809,000 tonnes at an average grade of 3.3% U(3) O(8) ), plus combined Inferred Mineral Resources of 3.0 million pounds U(3) O(8) (82,000 tonnes at an average grade of 1.7% U(3) O(8) ).

The PFS was completed 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 U(3) O(8) over a 14-year mine life, with a base case pre-tax net present value ('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 U(3) O(8) . The PFS was 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.