Why Denison Mines uses the ISR mining method for its uranium deposits (Video)
Denison Mines Corp. (TSX: DML) is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. In addition to its 90 per cent owned Wheeler River project, which ranks as the largest undeveloped high-grade uranium project in the infrastructure-rich eastern portion of the Athabasca Basin region, Denison’s Athabasca Basin exploration portfolio consists of numerous projects covering approximately 320,000 hectares.
Jim Gordon: Hi, I’m Jim Gordon, you’re watching Market One Minute. Joining us today is David Cates, President and CEO of Denison Mines. David let’s jump right in and talk about the advancements that Denison has made specifically with the flagship project, Wheeler River.
David Cates: Yeah thanks Jim, it’s really been two and a half years of engineering work and in our geological team contributing to an updated resource estimate for the project. Now the largest undeveloped project in the eastern Athabasca Basin. In 2016, we took a look at how that project might work as two deposits being developed together with a PEA or a preliminary economic assessment. And in the last two years, we’ve taken that result, which is really a scoping level, stress test type study to see how we can maximize the project. And where we’re at now is we’ve just completed a pre-feasibility study for the project, really trying to leverage the super high-grade Phoenix deposit.
Jim Gordon: Well David, can we talk about the highlights from your recently announced PFS?
David Cates: Well the PFS was actually quite dramatic. We were looking at the project before as two underground mining operations with our Phoenix and Gryphon deposits being developed together. What we’ve done now is we’ve really looked at how to maximize that Phoenix deposit. We’re now looking out of it as an in-situ recovery project. So, we’d use ISR mining for Phoenix and that’s quite a dramatic change, and we’ve taken Phoenix from being a sort of marginal deposit to potentially the lowest cost undeveloped uranium deposit globally with costs estimated under $4 US per pound.
Gryphon’s still a great addition to that. We’re adding additional pounds, under $12 US per pound on Opex, taken together we’ve got something like a 14-year mine life with average production over seven and a half million pounds. So it’s large scale and now we’re really positioned not only as the largest undeveloped project in the eastern basin but also probably the lowest cost project globally.
Jim Gordon: Yeah, it’s interesting that you chose the ISR mining method for Phoenix. Now, can you explain the ISR mining method and how it works?
David Cates: Yeah ISR mining, it’s really something that’s well established. Particularly in the uranium business, represents over half of production today being used globally and in the United States, Australia, Russia, Kazakhstan. These are all some of your lowest cost producing assets from the world.
The way it works is you’re basically mining the uranium while it’s in the ground and you’re not taking it out of the ground unless it’s in your mining solution. So, you drill a well into the Earth, you move a mining solution through the ore body and you recover it through another well without having to get underground and actually blast or move rock.
The big benefit of this is that you’re not going to produce any tails, right. All you’ve brought out of the ground is uranium through your mining solution. You’re not sinking shafts; you’re not digging pits; capital costs are low, and we’ve got very low operating costs. That’s why it is a preferential way for mining for uranium globally.
Jim Gordon: Yeah, it sounds interesting, but can you explain what makes Phoenix amenable to this type of mining method?
David Cates: Yeah, Phoenix is unique in the Athabasca Basin. A lot of this has to do with the geology and the location of the deposit. For ISR, you need a few elements to be going your way. You need rock that’s permeable, you need uranium that’s easily leachable, and you need to be able to contain that mining fluid. So, at Phoenix, our studies and our analysis suggest that we’ve got that permeability, the leachability is well established and what we’ve done now is used technology to create a containment for that mining solution using a freeze curtain or a freeze dome over the deposit. And I know that seems like it’s creative, it is in its application, but freezing technology’s something that’s being used throughout the Athabasca and around the world as an established technology for mining.
Jim Gordon: Well it’s interesting. We haven’t heard about the ISR mining in the Athabasca Basin before. Are there many deposits in the Athabasca where this type of mining can be used?
David Cates: There’s not a long list. Phoenix is really unique; it’s the highest grade undeveloped uranium deposit in the world, and it’s really the only undeveloped deposit that’s situated at that unconformity and highly permeable sandstone. So, some people have asked well why hasn’t this been brought up before? And I think a lot of that has to do with the fact that there haven’t been other companies that have been motivated to solve this problem.
Denison is positioned to be the next uranium producer, and we’re really trying to put our assets at the front of the line, be in the pole position for this uranium cycle, and we’re blessed with an asset like Phoenix that actually is amendable. So, it makes a lot of sense that it hasn’t been thought of before and that we would be the ones to come up with this idea.
Jim Gordon: Well it sounds like there’s some very exciting catalysts ahead for Denison, specifically the advancement of the Wheeler Project. Now, what are the next steps ahead?
David Cates: Well, our economics look very interesting, even at today’s prices. We’re not expecting to have to need that price to rise considerably to really justify advancing the asset. So, the next step is really starting permitting. Permitting is a long lead item for the Athabasca Basin. So that’ll be our choice coming up is do we advance into permitting? And once we’ve started that process, we’ll certainly have additional studies that we’ll have to carry out, some de-risking around some of the technologies that we’re looking at using.
But, I actually think that’s a really great thing for our story because each one of these steps through the development cycle can be a bit boring. In our case, we’re going to have meaningful developments coming out of our project work as we de-risk some of these elements of ISR at Phoenix, and each one of those stands to be a very meaningful catalyst for the stock.
Jim Gordon: Well David, sounds like some exciting news going forward for Denison. Thanks for joining us today.
David Cates: My pleasure. Thanks Jim.