Denison Mines Corp 6-K, filed Feb 24, 2020
Denison Mines Corp. (DNN)
6-K
2020-02-24
For: 2020-02-24
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Added on
April 07, 2026
About this 6-K
Denison Mines Corp filed this 6-K on February 24, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
Date: February 24, 2020
Commission File Number: 001-33414
Denison Mines Corp.
(Translation of registrant’s name into
English)
1100-40 University Avenue, Toronto Ontario, M5J 1T1
Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form
40-F.
Form
20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): ☐
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7): ☐
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
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Denison Mines Corp.
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/s/ Amanda Willett
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Date:
February 24, 2020
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Amanda
Willett
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Corporate Counsel and Corporate Secretary
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EXHIBIT
INDEX
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Exhibit Number
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Description
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99.1
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Exhibit 99.1
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Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
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PRESS
RELEASE
DENISON REPORTS RESULTS FROM PHOENIX ISR FIELD TESTS
CONFIRM ABILITY TO ACHIEVE HYDRAULIC CONDUCTIVITY
VALUES
CONSISTENT WITH PRE-FEASIBILITY STUDY
Toronto, ON – February
24, 2020. Denison Mines Corp. (“Denison” or the
“Company”) (DML: TSX, DNN: NYSE American) is pleased to
report that the results from hydrogeological test work, completed
in 2019 at the high-grade Phoenix uranium deposit
(“Phoenix”), have confirmed the ability to achieve bulk
hydraulic conductivity values (a measure of permeability)
consistent with the Pre-Feasibility Study (“PFS”)
completed for the Company’s 90% owned Wheeler River Uranium
Project (“Wheeler River”), located in northern
Saskatchewan, Canada.
During
the summer and fall months of 2019, Denison collected an extensive
database of hydrogeological data as part of an In-Situ Recovery
(“ISR”) field test program (the “2019 Field
Test”) at Phoenix. The 2019 Field Test was designed to
further evaluate the ISR mining conditions present at Phoenix and
is expected to support the completion of a future Feasibility Study
(“FS”) (see Denison’s press release dated
December 18, 2019 for additional details regarding the 2019 Field
Test).
A key element of the 2019 Field Test was the
completion of various pump and injection tests in two large
diameter commercial scale wells (“CSWs”) installed
within the Phoenix orebody. These tests were designed to allow for
the simulation of fluid flow under conditions similar to an
envisioned commercial ISR production environment – ultimately
facilitating a quantitative assessment of the bulk hydraulic
conductivity of the Phoenix orebody and surrounding rock
formations. For ISR mining operations, the term “hydraulic
conductivity” is used to describe the ease with which a fluid
can move through the pore spaces or fractures within a host rock.
Hydraulic conductivity, commonly represented by the symbol
”K”, is often stated as a rate of flow (under a
unit hydraulic gradient through a unit cross-sectional area of aquifer) and is
typically reported in units of metres/sec (“m/s”), or
metres/day (“m/d”).
Highlights
●
Numerical groundwater simulations in the PFS use a
K value of approximately 1 x 10-6
(or 0.000001) m/s, or 8.6 x
10-2
(or 0.086) m/d in order to achieve a
flow rate of 500 litres per minute;
●
Pump and injection tests completed from CSW2
(drill hole GWR-032), after deployment of the MaxPerf Drilling
Tool, produced K values ranging from 3.7 x 10-7
(or 0.00000037) to 9.6 x 10-7
(0.00000096) m/s or 3.3 x 10-2
(or 0.033) to 8.4 x
10-2
(or 0.084) m/d, which is consistent
with the K values used in the PFS;
●
Twenty-three
(23) packer tests were conducted as part of the 2019 Field
Test. Packer testing also measures bulk hydraulic
conductivity, with 14 of 23 results (60%) producing K values in
excess of the values used in the PFS, without using the MaxPerf
Drilling Tool; and
●
Matrix
permeability test work demonstrated that several competent
high-grade massive uraninite samples contain unique honeycomb-like
interconnected pore spaces that exhibit permeability and hydraulic
conductivity values consistent with the PFS.
David Bronkhorst, Denison’s Vice President
Operations, commented, “The initial data from
the 2019 Field Test shows that the K values in the immediate
vicinity of GWR-032, after deploying the MaxPerf Drilling Tool, are
consistent with the K values used in the PFS for the application of
ISR mining at Phoenix. This is an important milestone from a
de-risking perspective and is especially rewarding for our
technical team – having recently completed the
first-of-its-kind ISR field test in the Athabasca Basin
region.
Permeability is an important consideration for the refinement of
the wellfield parameters for Phoenix – impacting our future
plans for well spacing, number of active wells, pressure
differential between wells, and ultimately flow rate required to
achieve a desired level of annual production. Combined with the
recently announced metallurgical test results, we are encouraged by
the potential for additional technical work to support meaningful
optimization of the PFS mine plan, and the addition of enhanced
operational flexibility, in a future Feasibility
Study.”
Background
The
hydrogeological test work incorporated into the PFS (see
Denison’s press release dated September 24, 2018) included
limited packer (32) and open hole (3) tests, equating to 35
combined tests. An additional 11 permeability tests were completed
on intervals of competent core. These data sets were incorporated
into a numerical groundwater model to assess the sensitivity of ISR
wellfield design and operating practices to various rates of fluid
flow.
The PFS production plan is based on many
variables, including the assumption that 10 active hexagonal well
patterns would produce a sufficient flow-rate (500 litres per
minute) at a given uranium concentration (10 g/L) to achieve an
overall production level of 6 million pounds U3O8
per year. Based on the numerical
groundwater model, a well spacing of 10 metres, a pressure
differential of 1 MPa, and a K value of approximately 1 x
10-6
(0.000001) m/s or 8.6 x
10-2
(0.086) m/d on average, is expected to
be required to achieve the targeted flow-rate of 500 litres per
minute.
The
2019 Field Test was designed to build on the hydrogeological data
collected as part of the PFS and to further evaluate the ISR mining
conditions present at Phoenix as part of the preparations for a
future FS. The 2019 Field Test significantly expanded upon the
hydrogeological investigations undertaken as part of the PFS
– including test work designed to evaluate both the bulk
hydraulic conductivity and matrix permeability within the orebody
of Test Area 1 and Test Area 2 (see Figure 1), in order to
understand the large- and small-scale fluid flow characteristics,
respectively.
Further Discussion of the 2019 ISR Field Test Program
Hydrogeological
tests of bulk hydraulic conductivity were completed using a series
of monitoring wells and CSWs to pump or inject water through the
orebody of Test Area 1 and Test Area 2 (see Denison’s press
release dated December 18, 2019). The most representative test work
completed involved CSW2 (GWR-032), installed within the Phoenix
orebody. Highlight results from the CSWs can be summarized as
follows:
●
Test Area 2 - CSW2 (drill hole GWR-032)
o
Pump and injection tests completed from CSW2
(drill hole GWR-032) (see Figure 2), after deployment of the
MaxPerf Drilling Tool, produced K values ranging from 3.7 x
10-7
(or 0.00000037) to 9.6 x
10-7
(or 0.00000096) m/s or 3.3 x
10-2
(or 0.033) to 8.4 x
10-2
(or 0.084) m/d, which is consistent
with the K values used in the PFS;
o
The
demonstrated ability to achieve hydraulic conductivity values,
estimated from the tests completed in Test Area 2, that are
consistent with the values used in the PFS is highly significant
– considering Test Area 2 contains approximately 30% of the
Phoenix Zone A Indicated Mineral Resource.
●
Test Area 1 - CSW1 (drill hole GWR-031)
o
Pump and injection tests completed from CSW1
(drill hole GWR-031) (see Figure 3), after deployment of the
MaxPerf Drilling Tool, produced K values as high as 6.0 x
10-8
(or 0.00000006) m/s or 5.2 x
10-3
(or 0.0052) m/d;
o
While CSW1
was successfully completed to its desired depth, certain technical
challenges associated with the installation of the well screen
assembly impacted the effectiveness of a significant portion of the
well screening. Upon receipt of results, the obstructed well
screening has been interpreted to have rendered the well less
effective for the purposes of pump and injection testing and
ultimately the estimation of K values. These challenges were
corrected during the installation of CSW2.
Taken
together, the ranges of bulk hydraulic conductivity observed during
the 2019 Field Test are supportive of the numerical groundwater
modelling conducted as part of the PFS.
Additional Supportive Permeability and Porosity Tests
Additional
supportive test work completed during the 2019 Field Test included
permeability and porosity tests conducted either downhole, or on
mineralized drill core recovered during the test program (see
Denison’s press release dated December 18, 2019 for further
details).
●
Downhole Packer Tests
o
Twenty-three
(23) additional packer tests were conducted as part of the 2019
Field Test. Packer testing measures bulk hydraulic conductivity,
with 14 of 23 results (60%) producing K values in excess of the
values used in the PFS, without using the MaxPerf Drilling
Tool;
o
These packer
tests significantly expanded on the previous data sets from the
PFS.
●
Matrix Permeability Test Work
o
The tests
were conducted using a gas probe permeameter and included over
1,200 measurements from individual core samples collected from Test
Area 1 and Test Area 2;
o
This level of
detailed permeability testing is specialized – adding unique
value to the ISR industry by providing considerable detail
regarding permeability values within the ore zone;
o
The matrix
permeability test work examines the porous rock volume, including
microfractures and pore spaces, but excludes most of the
macroscopic faults or fractures, which are typically evaluated
during bulk hydraulic conductivity testing. As such, matrix
permeability generally refers to the small-scale fluid flow regimes
associated with areas of highly competent host rock;
o
The matrix permeability test work shows hydraulic
conductivity values ranging from 1.5 x 10-13
to 5.0 x 10-6
m/s (or 1.30 x 10-8
to 0.43 m/d), which are broadly in
line with the PFS and in some instances exceed the values used in
the PFS for bulk hydraulic conductivity;
o
Importantly,
matrix permeability test work demonstrated that several competent
high-grade massive uraninite samples contain unique honeycomb-like
interconnected pore spaces that exhibit permeability and hydraulic
conductivity values consistent with the PFS.
Taken
together, the ranges of bulk hydraulic conductivity and matrix
permeability observed during the 2019 Field Test are supportive of
the numerical groundwater modelling conducted as part of the PFS.
Additional hydrogeological test work is necessary to further
understand the small- and large-scale fluid flows at Phoenix to
support the completion of a future FS.
The
extensive hydrogeological data sets collected during the 2019 Field
Test, discussed herein, are expected to be incorporated into the
comprehensive hydrogeological model being developed by Petrotek
Corporation (“Petrotek”) for Phoenix. This exercise,
combined with future field testing, is expected to facilitate
detailed mine planning as part of a future FS. Petrotek is a
specialist in the technical evaluation and field operation of
subsurface fluid flow and injection projects, including significant
ISR uranium mining experience in various jurisdictions. Denison
expects the hydrogeological model and final report to be completed
in late Q1 2020, which will also allow for further planning of
additional ISR field tests.
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 – including combined Indicated
Mineral Resources of 132.1 million pounds U3O8 (1,809,000 tonnes
at an average grade of 3.3% U3O8), plus combined
Inferred Mineral Resources of 3.0 million pounds U3O8 (82,000 tonnes at
an average grade of 1.7% U3O8). The project is
host to the high-grade Phoenix and Gryphon uranium deposits,
discovered by Denison in 2008 and 2014, respectively, and is a
joint venture between Denison (90% and operator) and JCU (Canada)
Exploration Company Limited (10%).
A PFS was completed for Wheeler River 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 U3O8 over a 14-year
mine life, with a base case pre-tax 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
U3O8.
The PFS is 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.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca Basin region of northern
Saskatchewan, Canada. In addition to the Wheeler River project,
Denison’s Athabasca Basin exploration portfolio consists of
numerous projects covering approximately 280,000 hectares.
Denison’s interests in the Athabasca Basin 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 66.57%
interest in the J Zone and Huskie deposits on the Waterbury Lake
property. Each of Midwest, Midwest A, J Zone and Huskie are located
within 20 kilometres of the McClean Lake mill.
Denison is also engaged in mine decommissioning and environmental
services through its Closed Mines Operations division and is the
manager of Uranium Participation Corp., a publicly traded company
which invests in uranium oxide and uranium
hexafluoride.
For more information, please contact
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David
Cates
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(416) 979-1991 ext.
362
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President and Chief Executive
Officer
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Sophia
Shane
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(604) 689-7842
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Investor
Relations
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Follow Denison on Twitter
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@DenisonMinesCo
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Qualified Persons
Certain hydrogeological results and interpretations thereof
contained in this release related to the 2019 Field Test (including
the hydrogeological investigations carried out via pump and
injection tests and associated analyses) were prepared by Mr. Errol
Lawrence, PG (Senior Hydrogeologist), and Mr. Aaron Payne, PG
(Senior Hydrogeologist), at Petrotek, each of whom is an
independent Qualified Person in accordance with the requirements of
NI 43-101.
The other technical information contained in this release has been
reviewed and approved by Mr. David Bronkhorst, P.Eng,
Denison’s Vice President, Operations, or Mr. Dale Verran,
MSc, P.Geo, Pr.Sci.Nat., Denison's Vice President, Exploration,
each of whom is a Qualified Person in accordance with the
requirements of NI 43-101.
Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this news release constitutes
‘forward-looking information’, within the meaning of
the applicable United States and 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 news release contains forward-looking
information pertaining to the following: the 2019 Field Test and
related evaluation assumptions, interpretations, activities, plans
and objectives; the current and continued use and availability of
third party technologies, such as MaxPERF, as applicable; the
results of the PFS and expectations with respect thereto;
development and expansion plans and objectives, including plans for
a feasibility study; and expectations regarding its joint venture
ownership interests and the continuity of its agreements with its
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, 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 field test program discussed herein may not be maintained
after further testing or be representative of actual conditions
within the Phoenix deposit. In addition, Denison may decide or
otherwise be required to discontinue testing, evaluation and
development work at Wheeler River, and may not complete a FS, 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 Denison’s Annual
Information Form dated March 12, 2019 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 news 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 news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news release to conform such information to actual
results or to changes in Denison's expectations except as otherwise
required by applicable legislation.
Cautionary Note to United States
Investors Concerning Estimates of Measured, Indicated and Inferred
Mineral Resources and Probable Mineral Reserves: This news
release may use the terms 'measured', 'indicated' and 'inferred'
mineral resources. United States investors are advised that while
such terms have been prepared in accordance with the definition
standards on mineral reserves of the Canadian Institute of Mining,
Metallurgy and Petroleum referred to in Canadian National
Instrument 43-101 Mineral Disclosure Standards ("NI 43-101") and
are recognized and required by Canadian regulations, the United
States Securities and Exchange Commission ("SEC") does not
recognize them. 'Inferred mineral resources' have a great amount of
uncertainty as to their existence, and as to their economic and
legal feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of inferred mineral
resources may not form the basis of feasibility or other economic
studies. United States investors
are cautioned not to assume that all or any part of measured or
indicated mineral resources will ever be converted into mineral
reserves. United States
investors are also cautioned not to assume that all or any part of
an inferred mineral resource exists, or is economically or legally
mineable. The estimates of mineral reserves in this news
release have been prepared in accordance with NI 43-101. The
definition of probable mineral reserves used in NI 43-101 differs
from the definition used by the SEC in the SEC's Industry Guide 7.
Under the requirements of the SEC, mineralization may not be
classified as a "reserve" unless the determination has been made,
pursuant to a "final" feasibility study that the mineralization
could be economically and legally produced or extracted at the time
the reserve determination is made. Denison has not prepared a
feasibility study for the purposes of NI 43-101 or the requirements
of the SEC. Accordingly, Denison's probable mineral reserves
disclosure may not be comparable to information from U.S. companies
subject to the reporting and disclosure requirements of the
SEC.
Figure 1: Phoenix Zone A plan view showing Test Areas and well
installations completed during 2019.
Figure 2: Plan map and long section showing Pump/Injection wells,
Observation wells and CSW2
completed for ISR field testing in Test Area 2.
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GWR-031 (CSW)
Ore Zone
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Figure 3: Plan map and long section showing Pump/Injection wells,
Observation wells and CSW1
completed for ISR field testing in Test Area 1.