Uranium project developer Denison Mines has started installing higher cost, larger diameter commercial scale wells as part of the in-situ recovery (ISR) field test programme at its Wheeler River uranium project, in northern Saskatchewan.
The commercial-scale wells form part of the second stage of ISR field testing at the Phoenix deposit. It follows positive results from initial field tests, which have confirmed hydraulic connectivity within a significant portion of the ore zone tested.
“It is exciting to progress to the next phase of the summer 2019 programme and witness the installation of the first large-diameter wells, designed for commercial ISR production, in the Athabasca basin. We are looking forward to initiating further hydrogeological testing from these wells, which should allow for the simulation of fluid flow within the deposit under conditions similar to a commercial production environment,” president and CEO David Cates said on Thursday.
One well is planned for each of test area one and two. These wells will provide key inputs for the environmental-impact-assessment process and planned feasibility study.
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.
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.
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.