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SASKATOON - Orano Canada Inc. and Denison Mines Corp. (TSX:DML) (NYSE American:DNN) have commenced uranium mining operations at the McClean North deposit using their patented Surface Access Borehole Resource Extraction (SABRE) mining method, according to a press release statement issued Thursday. Denison Mines, which InvestingPro data shows has delivered a strong 14% return over the past week, appears undervalued according to InvestingPro’s Fair Value analysis.
The joint venture partners reported that mining began in June, with approximately 250 tonnes of high-grade ore exceeding 10% U3O8 recovered from the first mining cavity. Orano Canada, which owns 77.5% of the McClean Lake Joint Venture (MLJV) and serves as its operator, has successfully backfilled the first cavity and moved the SABRE rig to the second planned mining location. With a robust gross profit margin of nearly 91% and projected sales growth for the current year, Denison’s financial metrics reflect strong operational efficiency. InvestingPro subscribers can access 12 additional key insights about Denison’s financial health and market position.
This marks the first active mining operations at the MLJV since 2008. The recovered ore is now being processed at the McClean Lake mill.
The SABRE method, developed over nearly two decades from 2004 to 2021, uses a high-pressure water jet placed at the bottom of a drill hole to excavate a mining cavity. The excavated material is then air-lifted to the surface for processing.
"The first commercial production of uranium with the SABRE technique marks a new chapter, allowing us to access and explore new territories," said Xavier Saint Martin Tillet, President of Orano Mining.
According to the companies, SABRE offers several advantages over conventional mining, including a smaller environmental footprint, reduced water usage, lower power consumption, and minimized radiological exposure for workers. The method is designed to access small, high-grade uranium deposits that would be uneconomical to mine through traditional open-pit or underground methods.
The technology allows for selective and scalable mining with production ramp-up measured in months rather than years, potentially providing flexibility in response to uranium market conditions.
Orano Canada employs over 450 people in Saskatchewan, including approximately 375 at the McClean Lake operation. Denison holds a 22.5% interest in the MLJV.
In other recent news, Denison Mines Corp. has announced the discovery of additional high-grade uranium mineralization outside the previously defined area of the Gryphon uranium deposit in northern Saskatchewan. The discovery was made during a delineation drill program, where drill hole WR-837AD2 intersected 2.3 meters at 1.69% eU3O8, including a notable section of 0.5 meters at 5.48% eU3O8. This new mineralization was found approximately 40 meters from the known Gryphon deposit area, which remains open for further exploration and potential expansion. The Gryphon deposit, initially discovered by Denison in 2014, has indicated mineral resources of 61.9 million pounds U3O8 at an average grade of 1.7% U3O8. Additionally, the delineation program completed around 12,500 meters of diamond drilling, supporting the current geological interpretation and grade assumptions. A 2023 pre-feasibility study suggests that potential underground mining at Gryphon could result in an estimated after-tax net present value of $864.2 million, with an internal rate of return of 37.6%. The study bases these figures on probable reserves of 49.7 million pounds U3O8 and a uranium selling price of $75 per pound.
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