The action in Northern Saskatchewan never seems to let up. Following last week’s big news from NexGen Energy (TSXV:NXE), Denison Mines (TSX:DML,NYSEMKT:DNN) announced Thursday that it’s intersected more high-grade uranium mineralization near the Gryphon zone at its 60-percent-owned Wheeler River property.
Hole WR-641 intersected 3.9 percent eU3O8 over 9.2 meters, including 6.7 percent eU3O8 over 5.3 meters from 721.1 meters in depth. The hole is located 160 meters northwest of Gryphon, and 100 meters northwest and along the same section line as hole WR-633D1, which also contains high-grade mineralization.
The results from hole WR-641 are encouraging for the company because they represent one of the best basement rock intercepts seen at Wheeler River since the discovery of Gryphon in 2014. Overall, results from the company’s winter program suggest that Denison may be looking at the down-plunge extent of a series of lenses found at Gryphon.
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In a note to clients, Colin Healy, an analyst at Haywood Securities, stated, “[t]his area [north of Gryphon] continues to show potential to evolve into another significant deposit at the Wheeler River project, which is currently the subject of an ongoing Preliminary Economic Assessment (PEA), expected to be published within the next two months.”
Investors will recall that 2015 was a good year for Denison, which achieved a key milestone at Wheeler River with the completion of an initial mineral resource estimate for Gryphon. The deposit is estimated to host an inferred mineral resource of 43 million pounds of U3O8 at an average grade of 2.3 percent U3O8. Combined with the company’s high-grade Phoenix deposit, Wheeler River is estimated to contain an indicated mineral resource of 70.2 million pounds U3O8 at an average grade of 19.1 percent U3O8, as well as an inferred resource totaling 44.1 million pounds U3O8 at an average grade of 2.34 percent U3O8.
The maiden resource for Gryphon includes A, B and C series lenses, which according to the company all occur hanging wall to the basal pegmatite unit. The company is about halfway through its winter drill program, meaning that there are still plenty of opportunities to see further positive results. Denison’s forthcoming PEA will not include any of the current drill work on the new area north of Gryphon, as the study is currently underway and the zone still requires significant follow-up drilling to determine its full potential.
However, as Healy states in his note, “any additional significant resources in close proximity to the Gryphon zone could potentially later serve to enhance the economics of the first iteration of the forthcoming PEA.”
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any of the companies mentioned in this article.
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