Denison Mines (TSX: DML) has completed a preliminary economic assessment on their Midwest Main uranium deposit, which is found roughly 25 kilometres from the McClean lake uranium mill, which is part of a joint venture with Orano Canada.
The PEA is based on an operation that would see uranium extracted from the Midwest Main deposit using in-situ recovery methods, with 37.4 million pounds of uranium expected to produced over a 6 year mine life, resulting in average production of 6.1 million pounds annually.
A total of 676 ISR wells are expected to be utilized over the life of the project, with injection and extraction to occur on 10 metre spacing. A further 341 freeze holes are required in order to isolate groundwater from the mining area, while 50 monitoring wells are expected to be required around the perimeter of the mineralized zone.
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Processing of that uranium is expected to occur at the McClean Lake mill, resulting in low initial capital costs of $254 million. That estimate is based on the construction of the ISR wellfield and berm, a freeze plant, storage pads and ponds, a power substation, process infrastructure and operations facilities. No camp or airstrip is planned for the facility due to the short operating life, with lodging facilities three kilometres away at Points North Landing expected to be used over the life of mine.
Sustaining capital costs meanwhile are estimated at $446.9 million, leading to total capital costs of $701.2 million. Average cash operating costs over the life of mine are expected to average US$11.69 per pound of U3O8 produced, while all-in costs are estimated at US$25.78 a pound.
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The mine, based on a US$80 per pound uranium price, is estimated to have a net present value of $964.7 million on an after-tax basis, alongside an IRR of 82.7% and a payback period of 9 months.
The Midwest Main deposit is part of the Midwest joint venture, which Denison holds a 25.17% interest in, while the remainder is held by Orano, with Orano being the operator of the project.
Denison Mines last traded at $3.07 on the TSX.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
