Denison awards $16M detailed engineering contract to Wood for Phoenix

Denison Mines(TSX: DML; NYSE American: DNN) says it has awarded a contract for the completion of detailed engineering for the in-situ recovery (ISR) mining project planned for Denison's flagship Phoenix uranium project to Wood Canada. Given the scope of the work, the contract is estimated to be worth $16 million.

Phoenix and the nearby Gryphon uranium deposit are part of the Wheeler River uranium project, which Denison says is the largest undeveloped uranium mining project in the eastern portion of the Athabasca Basin in northern Saskatchewan. Denison has an effective 95% ownership interest in Wheeler River and is the project operator.

An NI 43-101 feasibility study was completed by Wood in 2023 to evaluate the use of the ISR mining method at Phoenix. The results of the Phoenix study reflected several years of technical de-risking efforts successfully completed by Denison and demonstrated very robust base case after-tax (adjusted) economics – including a net present value (NPV) of $1.56 billion (100% basis), an internal rate of return (IRR) of 90.0%, and an NPV to initial capital cost ratio in excess of 3.7 to 1.

The base-case in the Phoenix feasibility study assumed uranium selling prices in the range of US$66.53 to US$70.11 per pound  uranium oxide (U₃O₈₎. The current spot price for uranium is approximately US$105 per pound U₃O₈, reflecting an increase of over 50% from the average of the base-case pricing assumptions used in the Phoenix feasibility study of US$68.99 per pound U₃O₈.

"In recognition of Wood's performance leading the Phoenix feasibility study, competitive pricing, and alignment with our bid evaluation process, we are pleased to announce the award of a detailed design engineering contract to Wood,” said Kevin Himbeault, Denison's VP of operations. “Maintaining continuity through completion of the Phoenix feasibility study, front-end engineering design, and detailed design allows us to build on our combined knowledge and working relationship to deliver an engineering package that will ultimately support the construction and operation of the first ISR uranium mining operation in the Athabasca Basin."

The scope of the facilities to be designed by Wood under this contract is extensive, including site civil earthworks and distribution of utility piping throughout the main project site; electrical power distribution on site; surface piping and services for the mine wellfield; the process plant and related infrastructure; operations complex; maintenance and related buildings; metallurgical and analytical laboratories; and site-wide communications systems. The work will take about a year to complete.

Wood Canada is a subsidiary of Wood PLC.