Denison Mines is pleased to report the expansion of the mineralized zone discovered immediately north of the Gryphon deposit, as well as the completion of a successful winter exploration drilling program, on the Company's 60% owned Wheeler River property in northern Saskatchewan.
A total of 21,800 metres of diamond drilling, in 32 drill holes, was completed at Wheeler River during the winter exploration program.
The final weeks of the winter exploration program were highlighted by positive results from the follow up of the high-grade basement hosted mineralization previously reported in drill holes WR-633D1 and WR-641, both of which tested the area immediately north and northwest of the Gryphon deposit on section 5200GP earlier in the winter program.
Despite limited time for follow up this winter, Denison successfully identified additional mineralization on section 5200GP (drill holes WR-644 and WR-648) and encountered additional high-grade mineralization on section 5150GP (drill holes WR-646 and WR-651), representing a 50 metre step out to the southwest of section 5200GP.
These results have added several new lenses of mineralization to the Company’s geological model for the area north of the Gryphon deposit and highlight the potential for the discovery of additional lenses with further follow up drilling.
In addition to testing in the immediate vicinity of Gryphon, the 2016 winter exploration program was designed to explore for new uranium mineralization to the southwest of the Gryphon deposit along the K-North trend. Step-out drill testing in this area was successful in extending the mineralized K-North trend roughly 1.4 kilometres southwest of Gryphon.
Mineralization was encountered at or near the sub-Athabasca unconformity and continues to suggest that there is potential for a material discovery to occur at the unconformity or within the basement rock along the trend.
Denison’s President and CEO, David Cates, commented, "The 2016 winter exploration program at Wheeler River has been a tremendous success. Following the April 4, 2016 release of the Company’s findings from the Preliminary Economic Assessment for the Wheeler River project, which returned a pre-tax IRR of 20.4% using the current long term price for uranium, we are very pleased to be drilling a new zone of high-grade mineralization in very close proximity to the Gryphon deposit.
"Gryphon is a key part of the strategic development plan for Wheeler, and the potential to add pounds near Gryphon is very exciting and potentially meaningful from an economic standpoint. Planning for a roughly 25,000 metre 2016 summer drill program, at Wheeler River, is underway and is expected to focus on further expansion of the mineralization at Gryphon as well as testing of other high priority target areas."
On April 4th, 2016 Denison announced the results of a Preliminary Economic Assessment ("PEA") for the Wheeler River Project which, based on today’s long term contract price for uranium, included a pre-tax Internal Rate of Return ("IRR") of 20.4%, an indicative post-tax IRR to Denison of 17.8%, and Denison’s share of estimated initial capital expenditures of CAD$336M (CAD$560M on 100% ownership basis).
The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Results from the winter 2016 drilling program have not been incorporated into the current resource estimates or the PEA.
The Wheeler River property is a joint venture between Denison (60% and operator), Cameco Corp. (30%), and JCU (Canada) Exploration Company Limited (10%), and is host to the high-grade Gryphon and Phoenix uranium deposits discovered by Denison in 2014 and 2008, respectively.
The Gryphon deposit is hosted in basement rock and is currently estimated to contain inferred resources of 43.0 million pounds U3O8 (above a cut-off grade of 0.2% U3O8) based on 834,000 tonnes of mineralization at an average grade of 2.3% U3O8.
The Phoenix unconformity deposit is located approximately 3 kilometres to the southeast of Gryphon and is estimated to include indicated resources of 70.2 million pounds U3O8 (above a cut-off grade of 0.8% U3O8) based on 166,000 tonnes of mineralization at an average grade of 19.1% U3O8, and is the highest grade undeveloped uranium deposit in the world.
During the winter 2016 program, drill testing within 200 metres north and northwest of the Gryphon deposit returned numerous high-grade intersections within the Basal Pegmatite unit.
This stratigraphic unit occurs footwall to the Gryphon deposit and has undergone little previous drill testing. Initial high-grade intersections were obtained on Section 5200GP highlighted by 3.9% eU3O8 over 9.2 metres, including 6.7% eU3O8 over 5.3 metres, in drill hole WR-641, and 1.7% eU3O8 over 7.6 metres, including 6.3% eU3O8 over 1.7 metres, in drill hole WR-633D1 (see Denison news release dated March 10, 2016).