Canadian project developer Denison Mines is witnessing positive demand signals for uranium and believes that the narrative for top-tier new uranium mining projects has become “quite positive”, president and CEO David Cates said on Thursday.
“We have seen nuclear utilities seek to address significant future uncovered requirements in an environment with reduced visibility to available sources of supply – leading to increased long-term contracting activity and prices,” he said, adding that there was a “growing chorus of support” for the role that nuclear would play in the clean energy transition.
Denison is advancing the Wheeler River project, with an aim of moving the Phoenix deposit towards a development decision. Now, several years into the long-term plan for Wheeler River, the project “is uniquely aligned to emerge as the first in-situ recovery mine in the Athabasca basin region”.
The developer has continued its de-risking efforts at Phoenix, which involved extensive field and laboratory testing since completion of the prefeasibility study in 2018, which to date culminated in the completion of the installation and field testing of a five-spot commercial-scale ISR test pattern in 2021.
Cates said that the field test had been highly successful and confirmed key technical assumptions made in the PFS.
“Taken together with our positive metallurgical results, our work in 2021 has demonstrated tangible support for our selection of the ISR mining method for Phoenix and our decision to initiate a formal feasibility study.”
The company has completed a series of equity fundings in 2021 to fund the environmental assessment and feasibility study processes for Wheeler River. These financings raised gross proceeds of C$48.2-million.
In March last year, Denison raised C$107.9-million to fund the strategic purchase of 2.5-million pounds of uranium concentrates at an average price of $29.66/lb as an investment.
“The financing was designed to position our shareholders to benefit from the additional financial stability of our uranium holdings, while remaining fully leveraged to any future appreciation of uranium prices that might occur prior to the completion of a project financing for Wheeler River. Since then, the uranium spot market has improved considerably, with continued support from financial investors, leading to a significant increase in the spot price in 2021 and a C$41.4-million gain on Denison’s physical uranium holdings,” reported Cates.
Denison said that it was sufficiently funded to complete the feasibility study and environmental assessment processes for the project.
The company's plans for 2022 would focus on completing key technical and regulatory milestones for Wheeler River, while also supporting a secondary focus of unlocking value from its vast project portfolio, Cates said.