Uranium mining company Denison Mines is continuing to advance its in-site recovery (ISR) field test programme at the Wheeler River project, in Saskatchewan, reporting on Thursday that it has installed two commercial-scale wells at the Phoenix deposit.
These are the first large-diameter commercial-scale wells designed for ISR mining in the Athabasca basin, the TSX-listed company said.
Each well included the drilling of a large-diameter vertical borehole (about 12 inches in diameter) about 400 m from the surface, to intersect the Phoenix orebody, and the installation of well materials designed to meet expected environmental and regulatory standards for eventual ISR mining.
Denison said that Penetrators Canada, developers and operators of the MaxPERF drilling tool, successfully deployed the tool within the first commercial scale well and completed 28 lateral drill holes within a variety of ore types associated with the Phoenix deposit.
MaxPERF would be deployed at the second commercial-scale well for the remainder of the 2019 ISR field test programme.
Based on the successful completion of the wells, and following the successful deployment of the MaxPERF drilling tool, long-duration hydrogeological tests would be completed during the remainder of the 2019 ISR field test.
These tests are expected to be carried out in both wells to allow for the simulation of fluid flow, within Test Area 1 and Test Area 2 of Phoenix, under conditions similar to an envisioned commercial production environment.
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.
A prefeasibility study 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.