Denison Mines (TSX: DML) is expecting 2026 to be a year of progress for its Phoenix in-situ recovery mine, with the company announcing this morning that the project is ready for a final investment decision pending regulatory approvals. The company has released updated costing for the proposed project, while confirming a two year project construction timeline ahead of anticipated regulatory approval that is expected to be received in the first quarter of 2026.
“After another year of significant investment and progress, Denison stands ready to make a final investment decision and commence construction of the Phoenix ISR mine proposed for our flagship Wheeler River property. With the recent conclusion of the CNSC public hearing, and receipt of an initial approval to commence construction activities from the Province of Saskatchewan, we are poised to start 2026 with a series of positive catalysts that will mark the beginning of a new era in our Company’s long history,” commented David Cates, CEO of Denison Mines.
Capital cost estimates have risen to $600 million under the updated costing schedule, which represents a 43% increase when compared to the 2023 feasibility study for the project. The increase is said to be a result of inflation, cost increases, improved estimate precision, and project refinements. The 2023 feasibility study had expected $419.4 million in pre-production capital costs.
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Denison however claims that the increase in costing from the 2023 feasibility study is “only” 20% after adjusting for inflation.
Major refinements to the project are said to include the planned installation of large diameter wells throughout the Phase 1 mining area. The change is expected to allow each well to act as either an injection or recovery well. Under the original project design, roughly half of the wells in Phase 1 area were to be sized for injection only.
The estimate also includes $65 million in contingency funds and owners reserves, while excluding $53 million in pre-final investment decision expenditures that are expected to be incurred before a final investment decision is made in February 2026. Those expenditures are related to long-lead procurement commitments, and for detailed design engineering and construction planning, further impacting the cost profile of the Phoenix project. Total pre-final investment decision expenditures are expected to hit $100 million, versus $67.4 million estimated in the feasibility study.
As a result of the changes, the after tax net present value of Phoenix is said to have actually moved in a positive direction, from $1.56 to $1.57 billion, which is a result of the base case uranium price moving from a range of US$66.53 to US$70.11 a pound to a range of US$68.89 to $78.36 a pound. IRR meanwhile has dropped from 90% to 73%, while the payback period has grown from 10 months to 12 months.
“While our estimate of initial capital costs has increased modestly from the 2023 Phoenix FS, it is important to note that the Project is now ready for construction, continues to have only a two-year construction schedule, and that the updated costs are the basis for our project Control Budget – meaning that there are no further revisions expected prior to the commencement of construction,” continued Cates.
Denison meanwhile remains well funded to construct the project, with over $700 million in cash on the balance sheet. Current timelines suggest that Phoenix, provided approval is granted in Q1, could be producing uranium as early as mid-2028. Contract awards for construction are said to be pending while expected shipment dates for all key long lead items are on schedule.
Denison Mines last traded at $3.64 on the TSX.
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