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DAILY NEWS Sep 12, 2013 6:49 PM - 0 comments

Denison's summer exploration results on the Athabasca

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VANCOUVER — It's been an action-packed first half of the year for Toronto-based Denison Mines (TSX: DML; NYSE-MKT: DNN) and its portfolio of uranium projects throughout Saskatchewan's Athabasca Basin. After picking up a 60% stake in the Waterbery Lake discovery in mid-April — which is now held in partnership with Korea Waterbury Uranium — the company kick-started a 23-hole hole program at its Wheeler River joint-venture that continues to churn out promising results.

Denison expects to spend roughly $12 million in exploration on its Canadian asset package this year, with around $6.5 million invested in drilling through the first half of 2013. The company's 60% interest in the Wheeler River site will benefit from a large slice of that exploration capital, with roughly 11,000 metres complete at the project over the past three months.

Denison's summer program at Wheeler River focused predominantly on two targets, namely the Phoenix A and 489 zones. The company was chasing potential high-grade extensions outside of its current mineral resource at Phoenix, which totals 152 million indicated tonnes grading 15.6% U3O8 for 46.5 million contained lbs. as per a January resource update. At the 489 zone Denison was following up on previously-identified, low grade mineralization.

Phoenix continues to return strong results, with five of eight holes completed at the target encountering high-grade uranium mineralization. On Sept. 11 Denison released its final assay set from its Phoenix program, which was highlighted by: 10.3 metres grading 43.2% U3O8 from 402 metres depth in hole 525; 3.5 metres of 36.3% U3O8 from 410 metres in hole 496; 3.1 metres averaging 24.1% U3O8 from 405 metres depth in hole 498; and 2.5 metres of 19% U3O8 from 405 metres in hole 535.

BMO Capital Markets analyst Edward Sterck, who maintains a 'market perform' rating on Denison and a $1.50 price target, noted that hole 535 represents the highest grade-thickness of any drill hole on the property to date.

"The company is optimistic of the potential to expand the known high-grade mineralization through additional drilling at the A zone. In BMO Research’s view, the potential to expand resources is key to proving the economic viability of [Wheeler River]," Sterck wrote upon reviewing Denison's drill results.

The company punched an additional ten holes on 300-metre fences at the 489 Zone. Unfortunately only hole 518 returned significant mineralization, cutting 3.2 metres of 0.3% U3O8. The company notes, however, that "the alteration system and structural package in the basement continues beyond the area drilled and will be followed up in future programs."

Meanwhile, Denison has remained busy at Waterbury Lake completing a resource update on its J-Zone.

J-Zone’s resource is defined by 268 drill holes intersecting uranium mineralization over a combined east-west strike length of up to 700 metres and a maximum north-south lateral width of 70 metres. The deposit trends roughly east-west in line with the metasedimentary corridor and a cataclastic graphitic fault zone.

Denison's indicated resource at J-Zone now totals 291,000 tonnes grading 2% U3O8 for 12.81 million contained lbs. assuming a 0.1% U3O8 cut-off grade.

The company also completed electrical direct-current (DC) surveying at Waterbury along trend northwest of J-Zone in August. Denison reports that early-stage interpretation suggests that the area has geophysical features that are comparable to J-Zone and its Midwest deposit. A six-hole diamond drill program is underway to follow up on the results.

Denison reported cash and equivalents of $31 million at the end of June, after completing a $15-million, flow-through placement in late May. The company has traded within a 52-week window of $1.04 and $1.68, and closed down 2.4%, or 3¢, at $1.20 per share at the time of writing. Denison maintains 450 million shares outstanding for a $540 million press-time market capitalization.

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