Denison Mines awards $16M engineering contract to Wood

Denison Mines announced the award to Wood Canada, part of Wood PLC, of a contract for the completion of detailed design engineering for the In-Situ Recovery, or ISR, mining project planned for Denison’s flagship Phoenix uranium deposit. Phoenix and the nearby Gryphon uranium deposit are part of the Wheeler River Uranium Project, which is the largest undeveloped uranium mining project in the infrastructure-rich eastern portion of the Athabasca Basin region in northern Saskatchewan, Canada. Denison has an effective 95% ownership interest in Wheeler River and is the Project operator. An NI 43-101 Feasibility Study was completed by Wood in 2023 to evaluate the use of the ISR mining method at Phoenix. The results of the Phoenix Feasibility Study reflected several years of technical de-risking efforts successfully completed by Denison and demonstrated very robust base-case after-tax economics – including a net present value, or NPV, of $1.56B, an Internal Rate of Return, or IRR, of 90%, and an NPV to initial capital cost ratio in excess of 3.7 to 1. The base-case in the Phoenix Feasibility Study assumed uranium selling prices in the range of $66.53 to $70.11 per pound U3O8. The current spot price for uranium is approximately $105 per pound U3O8, reflecting an increase of over 50% from the average of the base-case pricing assumptions used in the Phoenix Feasibility Study of $68.99 per pound U3O8. Following completion of the Phoenix Feasibility Study, Denison’s board of directors approved the continuation of efforts to advance Phoenix towards a final investment decision and, in late 2023, the management committee of the Wheeler River Joint Venture approved a budget for the applicable 2024 expenditures. Detailed engineering design constitutes a significant portion of the work remaining to advance Phoenix to the point where a decision can be made to proceed to construction and, ultimately, production.