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DAILY NEWS Oct 4, 2012 5:48 PM - 0 comments

Denison posts Wheeler River's 2012 drill results

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Denison Mines (DML-T, DNN-X) has wrapped up the 2012 drill programs at its 60%-held Wheeler River uranium property in Saskatchewan and plans to update the project's resource estimate by year-end.

The Toronto-based firm published results today from its summer drill efforts and re-released the holes it completed earlier in the year. The project saw a total of 58 holes or 27,263 metres this year. Of the holes, 51 targeted mineralization at the Phoenix A and B deposits, while seven tested regional targets.

Drilling at Phoenix B focused on increasing the drilling density and on pinpointing extensions of previously known mineralization. Highlights from Phoenix B include 4.4 metres grading 18.37% U308 in WR-474, and 1.6 metres of 21.74% in WR-478.

At Phoenix A, the company said it intersected new mineralization along the interpreted cross structures in hole WR-446, which returned 1.5 metres of 1.32% U308, and in WR-454, which cut 5.5 metres of 0.43% U308 and 5 metres of 0.76% U308.  It also hit new mineralization along strike to the northeast of the deposit.

While the results from the deposits were encouraging, Denison had little luck with regional drilling. Of the seven holes or 3,555 metres completed on the three targeted areas, the company reported no significant mineralization. But it plans to further test the three targets as early as next year. 

Currently, the company is finalizing plans for the project's 2013 drill campaign, noting it should be similar in size to this year's program. It also is targeting to update the resource estimates for the Phoenix deposits later this year.    

“Whilst the infill drilling results could allow for an upgrade to the resource classification and a modest resource expansion, from the information provided it does not appear that a significant increase in known mineralization is likely,” writes BMO Capital Markets analyst Edward Sterck in a note. “BMO Research's view is that Wheeler River currently lacks critical mass and that resource expansion is needed.”

The project is located in the Athabasca Basin in northern Saskatchewan. Cameco (CCO-T, CCJ-N) holds 30% of Wheeler River and JCU Exploration Co. owns the remaining 10%.

Denison closed the day flat at $1.42 per share in Toronto. Sterck has a $1.80 price target on the company.  

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