Denison Mines (TSX: DML) is in a rare position – transitioning from project explorer/developer to potentially the producer of Canada’s next uranium mine.
To make it even more of an outlier, it’s set to become the country’s first in-situ recovery (ISR) producer in 2028 with its main Phoenix/Wheeler River project in the southeast Athabasca basin.
The ISR mining method injects a solution into underground wells, separates uranium from the ore and pumps it to the surface for extraction. It’s less expensive than hard rock mining, doesn’t require the digging of large pits and leaves fewer tailings. Wheeler River also comprises the adjacent Gryphon project, which is intended as a conventional underground mine.
“We’ll be the first new large-scale uranium mine in Canada since Cigar Lake,” Denison CEO David Cates told The Northern Miner in a mid-April interview, citing Cameco’s (TSX: CCO; NYSE: CCJ) major mine in Saskatchewan that started production in 2015.
“It’s something that we can take great Canadian pride [in] executing on this project and really returning Denison back to its legacy of being a globally significant source of Canadian uranium production.”
Denison, which was a major producer in the former uranium nexus of Elliot Lake, Ont. from the 1950s to the 1990s, is today valued at $1.6 billion. It’s ranked second among explorers of Saskatchewan’s Athabasca basin by market capitalization, behind NexGen Energy (TSX: NXE) and above IsoEnergy (TSX: ISO).
If Denison’s 2028 target for production at Phoenix becomes reality, it would also add to Canada’s clout as an exporter of uranium for countries seeking sources of the metal outside of Russian influence.
Final federal hurdles
Backed by a 2023 feasibility study for Phoenix and field tests that demonstrated the project’s commercial viability, Denison’s next milestones are federal forums in October and December. The Canadian Nuclear Safety Commission (CNSC) hearings are the final steps of the approval process for Wheeler River’s environmental assessment and uranium mine licence.
“We’re expecting to have a decision from the CNSC in roughly the first quarter of 2026,” Cates said.
After project approvals are received, a two-year construction period could start, a shorter timeline than conventional mines because ISR removes the need for ore handling, crushing and grinding infrastructure.
High-grade, high return
“Our grade coming out of the well field is so high that our process plant is simple and only involves iron removal [and] uranium precipitation,” he said, referring to the chemical recovery of uranium before it’s dried into a solid and packaged.
As the country’s first ISR uranium mine ever permitted in Canada, Wheeler River marks an important milestone for the industry as well, Cormark Securities mining analyst Nicolas Dion said in a mid-March note.
Wheeler River is among the lowest cost projects in the world, Dion also said. The feasibility study pegs the project’s capital costs at $419 million, with a post-tax net present value (NPV) of $1.16 billion and an internal rate of return (IRR) of 90%. Its mine life is estimated at 10 years.
Phoenix hosts proven reserves of 6,300 tonnes grading 24.5% uranium oxide (U3O8) for 3.4 million lb. of U3O8, and probable reserves of 212,700 tonnes at 11.4% U3O8 for 53.3 million lb. U3O8.
Rivals’ economics
Compared with its producing ISR uranium peers in the United States, Wheeler River isn’t cheaper but its returns are far higher based on the respective feasibility studies.
Peninsula Energy’s (ASX: PEN; US-OTC: PENMF) Lance mine in Wyoming has an NPV of $125 million (C$172 million), an IRR of 26% and capital costs of $80 million.
And enCore Energy’s (TSXV, Nasdaq: EU) Alta Mesa and Rosita mines in Texas have NPVs of $82 million and capital costs of $60 million, respectively, based on a single feasibility study for both mines. EnCore didn’t calculate IRRs for the mines because they were restart projects.
Tariff headwinds
While Denison’s path to production might appear straight, Cates foresees some possible turns over the next year as construction procurement encounters tariff uncertainties with the United States.
“It could be supplies that we’ve yet to identify that we believe are coming from Canada that may actually come from a combination of Canada and the U.S.,” he said.
The trade dispute has also widened the scope for potential uranium customers, even though an annex in President Donald Trump’s Liberation Day order appears to exempt uranium mined in Canada from 10% tariffs.
Customers beyond North America
“We would hope to supply many U.S. utilities that run their nuclear power plants with uranium,” Cates said. “All of those U.S. utilities still want Canadian uranium for their power plants, as there is no viable large-scale U.S. domestic uranium industry.”
“[But the tariffs have] caused us to think more about the global market and the importance of having a customer base that includes European and Asian utilities,” he said.
Korea Hydro & Nuclear Power in South Korea holds a 6.5% stake in Denison and is its largest shareholder, he noted.
“That’s a possible destination as well for our product.”
Be the first to comment on "Denison charts unique path towards production "