Americore Resources (TSXV: AMCO)
Drilling Value in the Silver State
Denison Mines (TSX: DML) is set to begin construction of its Phoenix uranium mine in northern Saskatchewan this March, marking the country’s first use of in-situ recovery (ISR) technology for nuclear fuel production.
The C$419 million ($310 million) capital investment and site preparation follow recent approvals from the Canadian Nuclear Safety Commission (CNSC), including the project’s environmental assessment and necessary licences. The Phoenix project, part of the larger Wheeler River property, is located in the southeastern Athabasca Basin, approximately 550 kilometres north of Regina.
“With construction anticipated to take approximately two years, commencing construction in March is expected to allow us to maintain our objective to achieve first production from Phoenix by mid-2028,” Denison CEO David Cates said in a statement Tuesday. The company expects Phoenix to position Denison among a select group of uranium suppliers capable of delivering significant new production before the decade’s end, Cates added.
Shares of Denison gained about 1% to C$5.92 in Wednesday morning trading on the Toronto Stock Exchange, giving the company a market capitalization of C$5.3 billion ($3.9 billion).
According to a 2023 feasibility study, the Wheeler River project demonstrates robust economics with a post-tax net present value of C$1.16 billion and an internal rate of return of 90%. The operation has an estimated mine life of 10 years. Proven reserves stand at 6,300 tonnes grading 24.5% uranium oxide (U₃O₈), containing 3.4 million pounds of U₃O₈, while probable reserves total 212,700 tonnes at 11.4% U₃O₈, representing 53.3 million pounds.
Denison holds a 90% interest in the project and serves as operator, with JCU (Canada) Exploration owning the remaining 10%. The Wheeler River property also includes the adjacent Gryphon deposit, which is planned as a conventional underground mining operation.
The ISR method, already widely used in the United States, involves injecting a solution into underground wells to dissolve uranium from the ore body before pumping it to the surface for extraction. The approach eliminates the need for large open pits, reduces tailings, and requires shorter construction timelines compared to conventional mines, as it avoids the need for ore handling, crushing, and grinding infrastructure.
The technology’s lower cost profile and reduced environmental footprint align with growing demand for uranium as nuclear power gains traction in the transition to low-emission energy sources.
Denison’s progress comes amid a wave of uranium development activity in Saskatchewan. Paladin Energy (TSX, ASX: PDN) received provincial environmental approval for its Patterson Lake South project last week, while NexGen Energy (TSX, NYSE: NXE; ASX: NXG) advanced to the second phase of its CNSC hearing for the Rook I project in February.
If all three projects reach production, they would rank among the top five operations in the Athabasca Basin by reserve size.
