The companies will spend about C$400-million to build an opencast mine - expected to produce some 36-million pounds of uranium between 2011 and 2013 - and expand a nearby mill.
The project will involve draining part of the Mink arm of the South Mc Mahon lake in Northern Saskatchewan to enable the construction of an openpit mine, Denison said in a statement.
The ore will be trucked along a dedicated haul road to the McClean Lake mill for processing.
The McClean Lake operation is some 15 km from the Midwest project, and is also owned by the JV partners.
Denison spokesperson James Anderson told Mining Weekly Online that an environmental-impact assessment had been completed and submitted to authorities for approval, and that the partners expected to receive all the neccessary regulatory approvals by mid-2009, after which site construction would begin.
Stripping of the rock over the ore would then start in early 2010, with ore removal beginning in mid-2011 and continuing through to 2013.
Areva communications manager Alun Richards declined to provide information on how Areva Resources Canada, a subsidiary of the French nuclear group, would finance its portion of the project, but Anderson said that the company expected to fund its share from internal cash flows, as well as a small amount of debt.
While the initial pit is expected to produce 36-million pounds of yellow cake uranium, other deposits and extensions located to the north, south and in the basement could be developed once the pit nears completion.
The McClean Lake mill, which began operations in 1999, was recently expanded to produce 12-million pounds a year of uranium, to handle ore from the beleaguered Cigar Lake uranium project, in which Areva holds 37,1%.
The Midwest partners now plan to increase the mill's capacity to 16-million pounds a year, Anderson said.
"However, should there be further delays to Cigar Lake, we would consider deferring some of that," he added.
Cigar Lake, which is expected to produce 18-million pounds a year of uranium at full capacity, was supposed to have been commissioned this year, but, after the mine flooded last October, 50% owner Cameco now says that it only expects to reach production at the mine in 2011.