Toronto- and New York-listed Denison Mines on Tuesday reported positive initial test results as part of the ongoing in-situ recovery (ISR) field test programme at the Wheeler River uranium project, in northern Saskatchewan, Canada.

The additional field work is required to increase the confidence and reduce the risks associated with the application of ISR mining at the Phoenix deposit, as outlined in the prefeasibility study (PFS) for Wheeler River.

Denison explained that the field testing programme was focused on in-situ testing within the Phoenix orebody, using water to evaluate hydrologic conditions that could be used to assess the hydraulic connection and potential mining solution flow between a series of test wells. The information collected through this process should increase the overall confidence of the application of ISR mining and facilitate detailed mine planning as part of the feasibility study process.

The initial test results reported on Tuesday had confirmed hydraulic connectivity between multiple test wells completed in Test Area 1 of the Phoenix deposit – providing significant preliminary indications of the suitability of Test Area 1 for the application of ISR mining.

“The programme is the first-of-its-kind for the Athabasca basin – assessing the suitability of the ISR mining method to the unique Phoenix deposit. The initial results from Test Area 1 are quite encouraging – with initial pump and injection tests confirming hydraulic connectivity between all of the test wells within the ore zone. We are looking forward to further results from Test Area 1 and Test Area 2, as well as the results from two large-diameter commercial scale wells planned for these Test Areas later this summer," said president and CEO David Cates.

Wheeler River is the largest undeveloped uranium project in the infrastructure-rich eastern portion of the Athabasca basin region – including combined indicated mineral resources of 132.1-million pounds U₃O₈, plus combined inferred mineral resources of three-million pounds U₃O₈.

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 net present value (NPV) of $1.31-billion (8% discount rate), internal rate of return (IRR) of 38.7%, and initial pre-production capital expenditure (capex) of $322.5-million.

The Phoenix ISR operation is estimated to have a standalone base case pre-tax NPV of $930.4-million (8% discount rate), IRR of 43.3%, initial pre-production capex of $322.5-million, and average operating costs of $3.33/lb U₃O₈.