Canadian mining company Denison Mines has completed the acquisition of Cameco Corporation’s minority stake in the Wheeler River Uranium Project.
The transaction takes the participating interest of Denison in the project to 90%, directly and indirectly through its subsidiary, Denison Mines Inc.
The company’s joint venture partner in the project, JCU (Canada) Exploration, waived its right of first refusal to pro rata participation in the transaction, retaining its 10% participating interest in the project.
Denison has acquired Cameco’s 24% interest in the Wheeler River Joint Venture in exchange for the issuance of 24,615,000 common shares of Denison, representing 4.2% of the company’s issued and outstanding common shares.
Wheeler River is the largest undeveloped uranium project in the eastern portion of the Athabasca Basin region, in northern Saskatchewan.
A project is a joint venture between Denison (90% and operator) and JCU (10%), and hosts the high-grade Phoenix and Gryphon uranium deposits, which were discovered by Denison in 2008 and 2014, respectively.
A Pre-Feasibility Study was carried out to examine the potential economic merit of co-developing the high-grade Gryphon and Phoenix deposits, and the results were announced on September 24, 2018.
The project is estimated to have mine production of 109.4 million pounds U3O8 over a 14-year mine life, with a base case pre-tax Net Present Value of $1.31bn (8% discount rate), Internal Rate of Return of 38.7%, and initial pre-production capital expenditure of $322.5m.
The Wheeler River Joint Venture partners are subject to different tax and other obligations, because of which the PFS has been prepared on a project (100% ownership) and pre-tax basis.
Denison is a uranium exploration and development company and its Athabasca Basin exploration portfolio comprises several projects covering 320,000 hectares.
The company’s interests in Athabasca Basin include a 22.5% ownership interest in the McClean Lake joint venture.
This includes several uranium deposits and the McClean Lake uranium mill, a 25.17% interest in the Midwest and Midwest A deposits, and a 65.45% interest in the J Zone deposit and Huskie discovery on the Waterbury Lake property.