Denison Reports Impressive Financial and Operational Results for 2023 Including Significant Increase in Phoenix ISR Project Economics and a $134 Million Gain on Physical Uranium Holdings
The Company reported earnings per share ('EPS') from continuing operations of
A description of the Company's plans and budget for 2024 ('2024 Outlook') is included in the MD&A.
We achieved a notable milestone for the project in 2023 with the signing of a Shared Prosperity Agreement with English
Significant progress has also been made in support of permitting the planned Phoenix ISR mine, consistent with our plans and objective to achieve first production in 2027 or 2028. The Company has responded to multiple rounds of technical comments and information requests from both the Provincial and Federal regulators in respect of its draft Environmental Impact Statement and has successfully reduced the number of outstanding requests, including confirmation from the
The evolution of the uranium market in 2023 has been quite interesting and has had a significant positive impact on Denison's balance sheet. With the uranium price rising from
Our hard work in past years has paved the way for an incredibly exciting time for our Company as we focus on delivery of our Phoenix ISR project. As outlined in our 2024 Outlook, the Company's expected priorities for Phoenix include advancement of detailed design engineering, long-lead procurement, permitting, and project financing. In parallel, we plan to continue to pursue opportunities to drive additional value from our diverse project portfolio – including preparations for the restart of uranium mining at
Highlights
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Exceptional annual earnings from continuing operations driven by
$134 million gain on physical uranium investments
During 2023, the Company's earnings from continuing operations of
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Feasibility Study for
Wheeler River Phoenix deposit yields significant increase in project economics
In
The Phoenix FS demonstrates robust economics including:
- Base case pre-tax Net Present Value ('NPV') (8%) of
$2.34 billion (100% ownership-basis) representing a 150% increase in the base-case pre-tax NPV8% for Phoenix from the 2018 Pre-Feasibility Study ('2018 PFS'). - Very robust base-case pre-tax Internal Rate of Return ('IRR') of 105.9%.
- Adjusted base case after-tax NPV8% of
$1.56 billion (100% basis) and IRR of 90.0% – with Denison's effective 95% interest in the project equating to an adjusted base case after-tax NPV8% of$1.48 billion . - Base case pre-tax and after-tax (adjusted) payback period of 10 months – equating to a reduction of 11 months for the pre-tax payback period from the 2018 PFS.
- Optimized production profile, based on ISR mine planning efforts evaluating production potential for individual well patterns – resulting in an increase to the planned rate of production by approximately 43% during the first five years of operations.
- Estimated pre-production capital costs of under
$420 million (100% basis), yielding an impressive base-case after-tax (adjusted) NPV to initial capital cost ratio in excess of 3.7 to 1. - Robust economics that easily absorb cost-inflation and design changes impacting both operating and capital costs, confirming Phoenix's estimated cash operating and all-in costs to be amongst the lowest-cost uranium mining projects in the world.
- Phoenix FS plans aligned and costed to meet or exceed environmental criteria expected to be required by the ongoing regulatory approval process.
- Updated mineral resource estimate, reflecting the results of 70 drill holes completed in support of ISR de-risking and resource delineation activities, which has upgraded 30.9 million pounds U3O8 into measured mineral resources. The updated mineral resource also resulted in an increase to the average grade of the Zone A high-grade domain, which is now estimated to contain 56.3 million pounds U3O8 in Measured and Indicated mineral resources at an average grade of 46.0% U3O8.
- Upgraded 3.4 million pounds U3O8 into Proven mineral reserves, representing the equivalent of 85% of production planned during the first calendar year of operations.
- Phoenix ISR de-risking completed and focus transitions to engineering design
The Phoenix FS reflects independent third-party validation of the selection of the ISR mining method for Phoenix and builds on the findings from a comprehensive and rigorous multi-year technical de-risking process highlighted by the highly successful completion of the leaching and neutralization phases of the Phoenix Feasibility
Through the technical de-risking process, Denison acquired extensive deposit-specific data and developed a robust ISR mine planning model that involved evaluation of the production potential for individual well patterns. With technical de-risking of the application of ISR at Phoenix substantially complete, Denison undertook front-end engineering design ('FEED') to support the advancement of the planned Phoenix operation and, with the results thereof substantially complete, is transitioning into detailed engineering design.
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Landmark Shared Prosperity Agreement signed with English
River First Nation
In
The signing of the SPA follows years of active engagement, including a four-month-long ERFN-led community consultation process ahead of the ratification vote, and represents a significant milestone in the history of both Denison's relationship with ERFN and the Project.
The SPA acknowledges that the Project is located within ERFN's Ancestral Lands and provides Denison with ERFN's consent to advance the Project. Additionally, the SPA outlines a shared recognition that ERFN is the Knowledge Keeper of the culture, ways, customs, and values of ERFN in relation to the environment and its Members and reflects ERFN's desire to prioritize sustainability. Amongst other key commitments, the SPA provides ERFN and its Members with (i) an important role in environmental monitoring and management, and (ii) benefits from community investment, business opportunities, employment and training opportunities, and financial compensation. Overall, the SPA describes a mutual commitment to maintain an open, respectful, and cooperative relationship between Denison and ERFN to ensure mutual prosperity as the development and operation of the Project progresses.
- Phoenix Environmental Impact Statement ('EIS') advanced through regulatory review
Denison's draft EIS for Phoenix was submitted to the
In the first quarter of 2023, the Company received technical comments and information requests from both regulatory agencies and the Company has provided technical responses to both the Provincial and Federal regulators.
In
In
- Phoenix ISR Feasibility Field Test Recovered Solution Management phase completed
In
The solution recovered during the FFT was stored on site and this final phase of the FFT involved the treatment of the recovered solution via an on-site purpose-built treatment system. Following treatment, a uranium precipitate product and a treated effluent were produced. The mineralized precipitates have been recovered from the process with over 99.99% efficiency. The treated effluent was tested to ensure compliance with permit conditions before being injected into a designated subsurface area.
- Cost update to the 2018 PFS for Wheeler River Gryphon deposit ('Gryphon') confirms the project's position amongst the lowest-cost uranium mining projects in the world
During 2023, the Company also completed a cost update ('Gryphon Update') to the 2018 PFS for conventional underground mining of the basement-hosted Gryphon deposit. The scope of the Gryphon Update was targeted at the review and update of capital and operating costs. Mining and processing plans remain largely unchanged from the 2018 PFS aside from minor scheduling and construction sequencing optimizations. The key points include:
- Base case pre-tax NPV (8%) of
$1.43 billion (100% basis) is a 148% increase in the base-case pre-tax NPV8% for Gryphon from the 2018 PFS. - Strong base-case pre-tax IRR of 41.4%.
- Base case after-tax NPV8% of
$864.2 million (100% basis) and IRR of 37.6% – with Denison's effective 95% interest in the project equating to a base case after-tax NPV8% of$821.0 million . - Base case pre-tax payback period of 20 months, and base case after-tax payback period of 22 months – equating to a reduction of 17 months for the pre-tax payback period from the 2018 PFS.
Importantly, Gryphon remains a highly valuable project that provides Denison with an additional source of low-cost potential production to deploy significant free cash flows expected from Phoenix.
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$113 million raised through equity financings to fund operations and the advancement of Phoenix
In
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Waterbury Lake inaugural ISR field test program completed
In
- Midwest internal concept study completed to examine potential application of ISR mining method
The Company completed an internal conceptual mining study examining the potential application of ISR at the Company's 25.17% owned
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Moon
Lake South discovery of high-grade uranium mineralization
In
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$15 million strategic investment in F3 Uranium Corp.
In
- Executive team changes undertaken in 2023
In
Denison also announced the addition of Mr.
About Denison
Denison is a uranium exploration and development company with interests focused in the
Denison's interests in
Through its 50% ownership of
Denison's exploration portfolio includes further interests in properties covering approximately 385,000 hectares in the
Technical Disclosure and Qualified Person
The technical information contained in this press release has been reviewed and approved by
Further details of the Phoenix FS and Gryphon Update are provided in Denison's press release of
Non-GAAP Financial Measures
This release includes certain terms or performance measures commonly used in the mining industry that are not defined under International Financial Reporting Standards ('IFRS'). Such non-GAAP performance measures, including NPV, are included because the Company understands that investors use this information to determine the Company's ability to generate earnings and cash flows. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of mines to generate cash flows. Non-GAAP financial measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.
Cautionary Statement Regarding Forward-Looking Statements
Certain information contained in this press release constitutes 'forward-looking information', within the meaning of the applicable
Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as 'plans', 'expects', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates', or 'believes', or the negatives and/or variations of such words and phrases, or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'occur', 'be achieved' or 'has the potential to'.
In particular, this press release contains forward-looking information pertaining to the following: projections with respect to exploration, development and expansion plans and objectives, including the results of the FS and the scope, objectives and interpretations of the technical de-risking process for the proposed ISR operation for the Phoenix deposit, including the FFT, and the interpretation of the results therefrom; expectations with respect to future evaluation and development of Phoenix, including engineering design efforts, long-lead item procurement; expectations regarding regulatory applications and approvals and the elements thereof, including the EIS; expectations with respect to Company resources and project financing; expectations regarding the performance of the uranium market and global sentiment regarding nuclear energy; expectations regarding Denison's joint venture ownership interests; and expectations regarding the continuity of its agreements with third parties. Statements relating to 'mineral reserves' or 'mineral resources' are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future.
Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Denison to be materially different from those expressed or implied by such forward-looking statements. For example, the results and underlying assumptions and interpretations of the FS as well as de-risking efforts such as the ISR field programs discussed herein may not be maintained after further testing or be representative of actual conditions within the applicable deposits. In addition, Denison may decide or otherwise be required to extend its evaluation activities and/or discontinue testing, evaluation and development work if it is unable to maintain or otherwise secure the necessary approvals or resources (such as testing facilities, capital funding, etc.). Denison believes that the expectations reflected in this forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be accurate and results may differ materially from those anticipated in this forward-looking information. For a discussion in respect of risks and other factors that could influence forward-looking events, please refer to the factors discussed in the MD&A dated
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking information contained in this press release is expressly qualified by this cautionary statement. Any forward-looking information and the assumptions made with respect thereto speaks only as of the date of this press release. Denison does not undertake any obligation to publicly update or revise any forward-looking information after the date of this press release to conform such information to actual results or to changes in Denison's expectations except as otherwise required by applicable legislation.
Cautionary Note to United States Investors Concerning Estimates of Mineral Resources and Mineral Reserves:
This news release may use the terms 'measured', 'indicated' and 'inferred' mineral resources.
Effective
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