Denison studying open pits at McClean, Hairhan

While chewing on two acquisitions, Denison Mines (DML-T, DNMIF-O) is digesting new resource estimates for the McClean Lake and Hairhan uranium deposits in Saskatchewan and Mongolia, respectively.

An independent resource calculation has established an indicated and smaller inferred resource at McClean, where operator Areva (ARVCF-O) owns 70%, Denison 22.5% and private Japanese uranium company Overseas Uranium Resources Development, 7.5%. The indicated resource, based on a cutoff grade of 0.1% U3O8, amounts to 186,000 tonnes grading 2.8% U3O8 in three zones, Pods 1, 2 and 5. Pods 1 and 5 carry an inferred resource of 3,300 tonnes grading 0.74% U3O8. Altogether, the resource at McClean is 5,200 tonnes (11.5 million lbs.) U3O8.

The resource calculation used a block model suited to open-pit mining, although tests of blindshaft boring late last year were successful. The partners believe an open pit could be put into production earlier, to take advantage of current high uranium prices.

Denison’s 70%-owned Hairhan uranium deposit in Dundgov province, Mongolia, has an inferred resource of 4.7 million tonnes grading 0.064% U3O8, plus 1.8 million tonnes inferred at 0.073% U3O8.

Another deposit, Haraat, has a historical estimate of 10.6 million tonnes grading 0.023% U3O8 calculated by Denison’s Russian partner, Geologoradzvedka, in the late 1990s. (Geologoradzvedka holds 15% and the Mongolian government the other 15% in Denison’s Gurvan Saihan joint venture.) Denison’s consultant, Scott Wilson Roscoe Postle, placed those resources in the inferred category.

Both Hairhan, about 350 km south of Ulanbaatar, and Haraat, about 230 km southeast of Ulanbaatar, are sandstone-hosted deposits where Denison is evaluating in situ leaching; tests in the late ’90s indicated potential for conventional acid leaching. The company has an 80,000-metre drill program under way on the two deposits.

More mineralization is known to exist above the water table, and was not included in either the Hairhan or Haraat resource figures. The partners plan to study open-pit mining and heap leaching as a possible mining and extraction plan for that mineralization.

Denison also announced it would extend its takeover offer for Australian uranium explorer OmegaCorp (OMGCF-O, OMC-A), to March 21. Denison holds 29% of OmegaCorp and its bid, A$1.10 per share or about $154 million, has been recommended by the OmegaCorp board.

In another deal, Denison and Areva subsidiary Pathfinder Mines agreed to a sale of five uranium properties in northern Arizona. Pathfinder gets US$5.5 million and retains a 1% net smelter return.

The five deposits consist of four sedimentary breccia pipes and one sandstone roll-front deposit, all in the Arizona Strip between the Colorado River and the Utah state boundary. The sandstone deposit, Moonshine Springs, has a historical resource of 700,000 tonnes grading 0.16% U3O8; the four breccia pipes taken together, about 470,000 tonnes at 0.45%.

Denison is evaluating those deposits as possible feeders for its White Mesa mill near Blanding, Utah.