Denison Announces Results from Midwest ISR Preliminary Economic Assessment, Including After-Tax NPV of $965 Million

Core Insights - Denison Mines Corp. has released a Preliminary Economic Assessment (PEA) for the In-Situ Recovery (ISR) mining of the Midwest Main uranium deposit, indicating a total production of 37.4 million pounds U3O8 over approximately 6 years, with an after-tax NPV of $965 million and an IRR of 82.7% [1][7][11] Project Overview - The Midwest project is a joint venture between Denison (25.17%) and Orano Canada (74.83), located 25 kilometers from the McClean Lake uranium mill [1][3] - The PEA highlights the potential for ISR mining to be a technically sound and economically robust method for uranium extraction, with low initial capital costs and high returns [5][6] Economic Metrics - The base-case post-tax NPV (8%) is $965 million, translating to Denison's share of approximately $243 million [7] - The pre-tax NPV (8%) is estimated at $1.62 billion, with a robust post-tax IRR of 82.7% and a payback period of approximately 9 months [11][36] - Estimated annual production is 6.1 million pounds U3O8, with total life-of-mine production of 37.4 million pounds U3O8 [7][22] Capital and Operating Costs - Initial capital costs are projected at $254 million, with Denison's share being approximately $64 million [7][31] - Average cash operating costs are estimated at $15.78 (USD$11.69) per pound U3O8, positioning the project among the lowest-cost uranium mining operations globally [9][33] Mineral Resource Estimate - The updated mineral resource estimate for the Midwest Main deposit includes 38.7 million pounds U3O8 in Indicated resources and 12.6 million pounds U3O8 in Inferred resources [14][15] - The effective date of the mineral resource estimate is December 2, 2024, and it reflects additional drilling activities since the previous estimate in 2018 [13][14] Mining Method and Infrastructure - The ISR mining method will utilize a three-phase development sequence over the projected 6-year mine life, optimizing NPV and capital efficiency [19][22] - The project will employ a freeze wall as a tertiary containment measure and will require a total of 676 ISR wells for complete coverage of the deposit [21][23] Processing and Environmental Considerations - Processing of uranium-bearing solution is assumed to occur at the McClean Lake mill, which has excess licensed processing capacity [24][25] - The ISR mining method is expected to reduce tailings and contaminant loading compared to conventional mining methods [26] Future Recommendations - The independent authors of the PEA recommend further evaluation and de-risking of the ISR mining method, including a potential Pre-Feasibility Study [39] - Additional work is suggested to focus on permeability characteristics, infrastructure designs, and cost verification [39]