Denison Mines Corp. · TSX:DML
Denison Mines — Corporate Update (April 2020)
36 slides from Denison Mines's corporate update, April 2020
Slide 1: Uranium Development & Exploration
Uranium Development & Exploration The Athabasca Basin, Northern Saskatchewan April 2020 | Corporate Update
Slide 2: Cautionary Statements & References
Cautionary Statements & References This presentation and the information contained herein is designed to help you understand management’s current views, and may not be appropriate for other purposes. This presentation contains information relating to other companies and provincial infrastructure, an
Slide 3: The Uranium Investment Thesis
The Uranium Investment Thesis: Fundamentals are improving, leading to a positive new uranium cycle Annual Utility Uranium Requirements (1) Key Market Themes: (million pounds U3O8 - per UxC Q1’20) 1. Long-term contracts from the previous 250 uranium bull cycle have acted as a lifeline to high-cost mi
Slide 4: Diversified Athabasca Basin Asset Base with Superior Development Leverage
Diversified Athabasca Basin Asset Base with Superior Development Leverage Strategic Asset Portfolio: • 90% interest in Flagship Wheeler River project • Development stage project • Largest undeveloped uranium project in the infrastructure rich eastern Athabasca Basin • Environmental Assessment (“EA”)
Slide 5: 280,000 Hectares of Prospective Exploration & Development Ground
280,000 Hectares of Prospective Exploration & Development Ground Focused in the Infrastructure Rich Eastern Athabasca Basin Denison Land Position as of June 30, 2019 Orano Waterbury (Denison 66.6%) McClean Lake Mill (Denison 22.5%) Hook-Carter (Denison 80%) Cigar Lake Mine Rabbit Lake Mill McArthur
Slide 6: Flagship Wheeler River Development Project
Flagship Wheeler River Development Project(1) 90% Denison Owned (10% JCU): • Host to two high-grade uranium deposits • NI 43-101 compliant Pre-Feasibility Study (“PFS”) considers staged development plan • Phoenix estimated to potentially have lowest costs of any undeveloped uranium deposit • In-Situ
Slide 7: Wheeler River PFS: Potential to be one of the lowest all-in cost uranium mining operations
Wheeler River PFS: Potential to be one of the lowest all-in cost uranium mining operations Sample of Global Production Costs(1)(2) Planned and Producing Operations (with Mining Method) $50.00 All-in / Full Costs – USD$/lb U3O8 $45.00 $40.00 $35.00 $30.00 $25.00 US$22.82 $20.00 $15.00 $10.00 US$8.90
Slide 8: Wheeler River PFS: Staged development plan with combined 14-year mine life
Wheeler River PFS: Staged development plan with combined 14-year mine life(1) ***IMPORTANT*** The Wheeler River PFS estimated pre-production activities to begin in 2021, assuming receipt of required regulatory approvals, with first production from the Phoenix deposit expected in 2024. Given recent s
Slide 9: Wheeler River PFS: Uranium price assumptions, commercial strategy, and sensitivities
Wheeler River PFS: Uranium price assumptions, commercial strategy, and sensitivities Base Case Price Assumptions Reflect Commercial Strategy: • Phoenix Operation: PFS Pre-Tax NPV8% (100% Basis) 3000 • Low all-in cost per lb U3O8 suggests contract “base-loading” not required 2500 • Uranium selling pr
Slide 10: Phoenix Deposit: Lowest-cost mining method with highest-grade undeveloped deposit
Phoenix Deposit: Combining the world’s lowest-cost uranium mining method with the world’s highest-grade undeveloped uranium deposit 10 ISR field testing at Wheeler River Phoenix Deposit, Summer 2019
Slide 11: Phoenix Geology: Unique uranium deposit with exceptionally high grades
Phoenix Zone A Phoenix Deposit – Plan View Schematic Cross Section Phoenix Geology: Unique uranium deposit with exceptionally high grades Highlights(1): • Mineralization is situated at or immediately above the unconformity(“UC”) Athabasca Sandstone • Two distinct zones – Phoenix A + B • Approximatel
Slide 12: Phoenix Operation: Application of low-cost ISR mining method
Phoenix Operation: Application of low-cost ISR mining method to high-grade Athabasca Basin ISR Mining Process(1): 1. Mining solution (also known as “lixiviant”) is pumped through a permeable orebody via injection well 2. Lixiviant dissolves the 4 uranium as it travels through the orebody 1 5 3. Uran
Slide 13: Phoenix Freeze Cap: Novel concept to contain mining solution
Phoenix Freeze Cap: Novel concept to contain mining solution, using established technology Artificial freeze cap replicates confining layer typically required for ISR mining operations(1) • Parallel cased holes drilled from surface and anchored into impermeable basement rock surrounding the Phoenix
Slide 14: Phoenix Test Work: Continues to confirm suitability of ISR mining method
Core Leach Test Apparatus at SRC Laboratory in Saskatoon Phoenix Test Work: Continues to confirm suitability of ISR mining method Ongoing and future test work designed to build upon initial data and test results incorporated into the PFS • PFS Laboratory Tests(1): High rates of recovery in extractio
Slide 15: Phoenix ISR Processing Plant
Phoenix ISR Processing Plant: Closed loop system and simplified plant design reduces the need for discharge On-Site Processing Plant(1) • Annual production between 6 and 12 million lbs U3O8 – depends on uranium concentrations from wellfield (10 g/L 6M lbs U3O8 / yr) • No crushing or grinding circu
Slide 16: Phoenix ISR Operation: Different mining method and a different type of operation
Phoenix ISR Operation: Different mining method and a different type of operation(1) Advantages of ISR mining compared to existing uranium mining in Canada: Small surface footprint Lower water consumption Lower energy consumption Potentially near zero CO2 emissions Small volume (potentially
Slide 17: ISR Field Test: A first of its kind in the Athabasca Basin
Phoenix ISR Field Test: A first of its kind ISR field test in the Athabasca Basin 17 17 Installation of Commercial Scale Wells as part of ISR Field test work at Wheeler River Phoenix Deposit, Summer 2019
Slide 18: ISR Field Test: A first of its kind ISR field test in the Athabasca Basin
Phoenix ISR Field Test: A first of its kind ISR field test in the Athabasca Basin(1) 2019 ISR Field Test Objectives: • In-situ field work necessary to increase the confidence / reduce risks associated with use of ISR mining method at Phoenix • Data required for detailed hydrogeological modelling • F
Slide 19: ISR field testing at Wheeler River Phoenix Deposit, Summer 2019
19 19 ISR field testing at Wheeler River Phoenix Deposit, Summer 2019
Slide 20: ISR Field Test: Positive initial results from Test Area 1
Phoenix ISR Field Test: Positive initial results reported from Test Area 1 Confirmed hydraulic connectivity within maximum extent of the ore zone tested • Initial pump and injection tests completed • Process involves pumping water from, or injecting water into, pump/injection wells insta
Slide 21: ISR Field Test: Positive initial results from Test Area 2
Phoenix ISR Field Test: Positive initial results reported from Test Area 2 Confirmed hydraulic connectivity within a significant portion of the ore zone tested • Test Area 2 is interpreted to be more geologically complex than Test Area 1 – relating to variable structure and alteration • Hydrau
Slide 22: ISR Field Test: Advancement to installation of Commercial Scale Wells
Phoenix ISR Field Test: Advancement to installation of Commercial Scale Wells(1) Athabasca Basin’s first large-diameter Commercial Scale Wells (“CSWs”) for ISR: • Positive ISR field tests provided confidence required to commence with the installation of higher-cost / larger-diameter CSWs • Completio
Slide 23: ISR Field Test: Successful deployment of the MaxPERF Drilling Tool
Phoenix ISR Field Test: Successful deployment of the MaxPERF Drilling Tool(1) Installation of CSWs allows for testing of MaxPERF Drilling Tool – to increase access to existing permeability of the ore zone • Successful installation of CSW1 (drill hole GWR-031, in Test Area 1) and CSW2 (drill hole GWR
Slide 24: Wheeler River Development Project: Two-asset project with staged development plan
Wheeler River Development Project: Two-asset project with staged development plan based on market fundamentals 24 Wheeler River Site Tour, Summer 2019
Slide 25: Phoenix Operation: Proposed site layout highlights ISR wellfield & surface infrastructure
Phoenix Operation: Proposed site layout highlights ISR wellfield & surface infrastructure 133,300 drill metres 94 Recovery wells 199 Injection wells 17 Monitoring wells N 25
Slide 26: Phoenix Operation: Potential for world's lowest cost per pound U3O8
Phoenix Operation: Potential for ISR mining method to produce world’s lowest cost per pound U3O8 Phoenix Operation PFS Result(1) Mine life 10 years (6.0 million lbs U3O8 per year on average) Average cash operating costs $4.33 (US$3.33) per lb U3O8 Initial capital costs (100% basis) $322.5 million Op
Slide 27: Gryphon Operation: Minimal site infrastructure owing to toll milling
Gryphon Operation: Minimal site infrastructure owing to toll milling & facilities at Phoenix site NN 27 27
Slide 28: Gryphon Operation: Additional low-cost production with conventional UG mining
Gryphon Operation: Additional low-cost production with conventional UG mining Moderate grades and style of mineralization allows for conventional UG mining(1) • 61.9 million pounds U3O8 @ 1.7% U3O8 Indicated mineral resources (1,643,000 tonnes)(2) • 1.9M lbs U3O8 in Inferred mineral resources (73,00
Slide 29: Gryphon Operation: Assumes processing at 22.5% Denison owned McClean Lake mill
Gryphon Operation: Assumes processing at 22.5% Denison owned McClean Lake mill(1) Processes +12% of global uranium production: • Operating under 10-year license granted by Canadian Nuclear Safety Comm. in 2017 • Licensed for 24M lbs U3O8 / year • PFS assumes Cigar Lake production will decline to 15M
Slide 30: Gryphon Operation PFS Result
Gryphon Operation: Additional low-cost production with conventional UG mining Gryphon Operation PFS Result(1) Mine life 6.5 years (7.6 million lbs U3O8 per year on average) Average cash operating costs $15.21 (US$11.70) per lb U3O8 Initial capital costs (100% basis) $623.1 million Operating margin(3
Slide 31: Wheeler River PFS: Statement of Reserves and Denison indicative post-tax results
Wheeler River PFS (1) : Statement of Reserves and Denison indicative post-tax results Reserves(2, 3, 4, 7, 8) Deposit Class. Tonnes Grade Lbs U3O8 Denison (90%) Phoenix(5) Probable 141,000 19.1% U3O8 59.7M 53.7M Gryphon(6) Probable 1,257,000 1.8% U3O8 49.7M 44.7M Total Probable 1,398,000 3.5% 109.4M
Slide 32: Diversified Asset Portfolio: Offers additional leverage to rising uranium prices
Diversified Asset Portfolio: Offers additional leverage to rising uranium prices 32 28
Slide 33: McClean Lake Uranium Project
McClean Lake Uranium Project(1): Processing plant licensed for annual production of 24M lbs U3O8 “(the APG) financing allows Denison to benefit immediately from the cash flow expected to be produced from the McClean Lake mill over the next several years, without the overhang of a bullet payment or c
Slide 34: Midwest Uranium Project
Midwest Uranium Project(1): Significant increase in mineral resources with updated estimate in 2018 “With the application of more rigorous and robust estimation procedures, in accordance with NI 43-101, we are pleased to see a significant increase in overall project resources, without additional rec
Slide 35: Waterbury Lake Uranium Project
Waterbury Lake Uranium Project(1): Mineral resources in close proximity to Roughrider & the McClean Lake mill “The high-grade mineralization at Huskie appears to be controlled by the intersection of east-west striking faults, associated with the graphitic gneiss unit, and cross-cutting northeast str
Slide 36: Capital Structure & Corporate Information
Capital Structure & Corporate Information Market Summary (1) Management & Directors Exchanges TSX: DML, NYSE MKT: DNN • David Cates (President & CEO, Director) Shares Outstanding 597.2 M • Mac McDonald (Exec. VP & CFO) Share Units 4.8 M • Dave Bronkhorst (VP Operations) • Tim Gabruch (VP Commercial)