Denison announces uranium mine final investment decision
Denison Mines Corp. [DML-TSX] has taken the final investment decision to proceed with construction of the $600 million Pheonix in-situ recovery uranium mine in Saskatchewan, with site preparation and construction activities scheduled to begin next month.
The Pheonix mine will produce about six million pounds a year of uranium oxide and forms part of the Wheeler River project in the eastern Athabasca Basin. “Making the FID [final investment decision] and the incoming initiation of construction activities at Pheonix mark the beginning of a new era in Denison’s history and the Canadian uranium mining sector,’’ said Denison CEO David Cates.
“Our teams have worked diligently over the past several years to bring Pheonix to a construction-ready state, obtain provincial and federal approvals, procure long-lead materials, and secure financing to be in a position to make this landmark decision and commence construction of the first new large-scale Canadian uranium mine in over two decades.’’
On Wednesday, Denison shares edged up 0.679% or $0.04 to $5.93. The shares currently trade in a 52-week range of $5.97 and $1.58.
Denison recently said the Canadian Nuclear Safety Commission has released the decision of its administrative tribunal approving the Environmental Assessment (EA) and issuing the License to Prepare Site & Construct Mine and Mill for the Pheonix project.
The announcement came after Denison said it had awarded Wood Canada Ltd. a construction management contract to oversee construction.
Wheeler River is the largest undeveloped uranium project in the eastern Athabasca region of northern Saskatchewan. The project is host to the high-grade Pheonix and Gryphon uranium deposits, discovered by Denison in 2008 and 2014, respectively, and is a joint venture between Denison (90% owner and operator) and JCU (Canada) Exploration Company Ltd. (holding 10%).
With all of the regulatory approvals received, uranium production is scheduled to start by mid-2028.
In 2023, Wood completed a feasibility study to evaluate the use of the ISR mining method and demonstrated robust economics.
In-situ recovery involves processing the uranium while it is still in the ground through the injection of catalyzing agents into the ore.
In-situ-recovery is only possible in porous geological formations (like sandstone) which are amenable to such a technique. On average, the capital spend needed to put an ISR uranium project into production is less than 15% of the cost to build a conventional hard-rock uranium mine.
Aside from the production cost, ISR leaves a much smaller environmental footprint because it does not require the construction of a tailings impoundment facility. Denison is aiming to be the first company to deploy the ISR method at a uranium project in Canada.