TORONTO (miningweekly.com) – The Phoenix uranium deposit, on the Wheeler River property in Canada's Athabasca Basin, could be “one of the most promising discoveries” in two decades in the uranium rich district, Denison Mines CEO Ron Hochstein suggested on Thursday.

Denison owns 60% of the Wheeler River joint-venture (JV), and is the operator. The balance is held by larger rival Cameco (30%) and JCU (Canada) Exploration Company (10%).

The Pheonix zone was discovered in 2008, and is already looking very promising, although the partners have only had one rig on the property so far.

“Based on in-house estimates it's already the fifth largest deposit discovered in the Athabasca basin,” Hochstein said in an interview after the company's annual shareholders meeting in Toronto.

The company will aim to expand the deposit over the course of this year, and also plans to complete a NI 43-101-compliant resource estimate before year end.

Denison produces uranium and vanadium from a handful of mines and a mill in the US, and is a minority partner in the McClean Lake JV, which operates uranium mines and a mill in the Athabasca basin of Saskatchewan.

The firm plans to produce 10-million pounds a year of uranium by 2020, compared with this year's expected output of 1,6-million pounds, Hochstein said.

The company has several development projects, including 70% of a project in Mongolia and 100% of the Mutanga & Dibwe deposits in Zambia.

It also owns 25,17% of the Midwest project, in Saskatchewan, which was put on ice by Denison, 70% owner Areva and minority partner Ourd Canada.

But Hochstein said he would need to see higher uranium prices before considering a construction decision on any of the development projects.

“We're going to need to see $60 to $70 a pound plus, in order to make those projects move forward,” he said.

Spot uranium prices have declined to $41,75/lb, and the long term price is sitting below $60/lb.

In Mongolia, the company had its licences renewed for three years and a resource report formally accepted by the government, but is waiting to see what implications the new Nuclear Energy Law in the country may affect the project.

In Zambia, Denison's environmental impact statement was accepted by the Zambian government late last year, and the firm was granted a 25-year mining license for its two properties in March.

The company still has about a year's worth of studies to complete on the project before it would be ready for a go-ahead decision, assuming prices were strong enough to justify the project, Hochstein said.

Denison will also consider taking on a strategic partner for the Zambian project, he added.

Besides the new projects, Denison also has idled mines in the US that it could bring back into production if prices strengthen.

FIRST QUARTER

The company reported a first-quarter net loss of $9,1-million after markets closed on Thursday, compared with a $1,3-million loss a year earlier.

Revenue was flat year-on-year, at $22-million and Denison ended the first quarter with $13-million in cash and cash equivalents and working capital of $71-million.

The firm sold 267 000 lb during the quarter, at an average price of $56,27/lb, plus 153 000 lb of ferrovanadium, at an average price of $12,55.

Last year, Denison sold a 17% stake in itself to the Korean Electric Power Corporation, which also signed an offtake agreement for 20% of the Canadian firm's uranuim production from 2010 to 2015.

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