Denison Mines Corp. [DML-TSX; DNN-NYSE American] said Tuesday November 17 that it has completed an independent preliminary economic assessment (PEA) for its Waterbury Lake uranium property in Saskatchewan. It said the PEA involves an evaluation of the potential use of the in-situ recovery (ISR) mining method at the Tthe Heldeth Tue (formerly the J Zone) deposit with associated processing at Denison’s 22.5%-owned McClean Lake mill.
The company said the PEA indicates that the project could emerge as a small-scale Athabasca Basin ISR uranium mining project that would feature low initial capital costs, low operating costs and globally competitive all-in costs.
Denison’s interests are focused on the Athabasca Basin region of northern Saskatchewan, including its 90%-owned Wheeler River Project, which holds the high-grade Phoenix and Gryphon uranium deposits (on the Wheeler River property).
Denison also owns a 22.5% interest in the McClean Lake joint venture, which includes several uranium deposits and the McClean Lake uranium mill. The mill is currently processing ore from the Cigar Lake mine under a toll mining agreement.
Waterbury Lake, including the J Zone (Tthe Heldeth Tue) and Huskie deposits, is owned by the Waterbury Lake Uranium Ltd. Partnership, of which Denison owns 66.90% and Korea Waterbury Lake Uranium Partnership (KWULP), which owns 33.10%. KWULP consists of a consortium of investors, in which Korea Hydro & Nuclear Power (KHNP) holds a majority position.
HKNP is based in Gyeongju, South Korea, and is now the country’s largest electrical power generation company, operating 24 nuclear power reactors and supplying approximately one quarter of the country’s electricity. HKNP is a significant shareholder in Denison, holding 10.42%.
The Waterbury Lake deposits are located within 20 km of the McClean Lake mill.
On Tuesday, Denison said the PEA for Waterbury Lake envisages a mine life of six years and annual production of 1.6 million pounds of U308 at an average cost of US$12.23 per pound. Initial capital costs are expected to be $112 million, with all-in-costs pegged at US$24.93 per pound.
By comparison, spot uranium was trading at US$30 a pound.
On Tuesday, Denison shares were down 2.2% or $0.01 to 45 cents on volume of 654,272. The shares are trading in a 52-week range of 75 cents and 23.5 cents.