Denison Mines Corp.said April 4 that a preliminary economic assessment on the Wheeler River uranium project in Saskatchewan peggeda base case pretax net present value of C$513 million at an internal rate of returnof 20.4%, on a 100% ownership basis. Payback is in three years.
Total CapEx is at C$1.10 billion, comprising of initial capitalcosts of C$560 million and sustaining capital costs of C$543 million.
The study looked at the underground development of the Gryphondeposit followed by the Phoenix deposit over a 16-year mine life, producing a totalof 104.8 million pounds of U3O8 and processing mine production at the McClean Lakemill.
Gryphon is expected to produce 40.7 million pounds of U3O8, overa seven-year mine life, at a cash operating cost of US$14.28 per pound of U3O8,while Phoenix will produce 64.0 million pounds of U3O8, over a nine-year mine life,at a cash operating cost of US$22.15 per pound of U3O8.
The base case assumes a price of US$44.00 per pound of U3O8.
Meanwhile, a production case scenario, which assumes a priceof US$62.60 per pound of U3O8, pegged a pretax net present value of C$1.42 billion,an internal rate of return of 34.1% and payback of 18 months.
Considering Denison's 60% stake in the Wheeler River projectand the recovered toll mill fees from its 22.5% interest in McClean Lake, a posttaxassessment on Wheeler River shows the base case net present value at C$206 millionand an internal rate of return of 17.8%.
For the production case, the posttax net present value is atC$548 million and the internal rate of return is 29.2%.
Denison said it plans to proceed with a pre-feasibility studyfor Wheeler River, which will take between 12 months to 18 months.
Wheeler River is a joint venture between Denison, and