VANCOUVER — Denison Mines’ (TSX: DML; NYSE-MKT: DNN) Wheeler River property is already home to the high-grade and still-growing Phoenix deposit, which has 52.3 million indicated lb. uranium oxide (U3O8) at an average grade of 15.6%. Now Denison’s drills have hit a new zone 3 km away that seems to offer similar grade potential.
Denison had two drills turning at Wheeler River in its year-end program. One was proving up high-grade material in lower-grade areas of the Phoenix resource, while the second probed a target initially known as the K-zone.
In March the second drill hit significant uranium when hole 556 cut 4.6 metres grading 9.7% U3O8. Denison renamed the area the “Gryphon zone,” and kept drilling.
Its first follow-up hole was collared 40 metres away and targeted the updip extension from hole 556. Hole 560 hit that target, returning two low-grade mineralized intervals between 653 and 680 metres depth.
Then it hit another mineralized lens that carried 17.3% U3O8 over 4.2 metres.
After this intercept, Raymond James analyst David Sadowski called Gryphon “one of the most significant uranium discoveries of the past few years” and a “game-changer” for Wheeler River.
Sadowski pointed out that the uranium encountered to date at Gryphon appears to be structurally controlled and hosted in sheared graphitic pelitic gneisses, with intensive and extensive alteration and wide section of bleaching, clay alteration and local hematite, indicating a powerful mineralizing fluid system.
That matters, given the location. As Sadowski writes, “Gryphon is in ‘elephant country,’” with the 59.9-million lb. high-grade Phoenix deposit 3 km southwest, and Cameco’s (TSX: CCO; NYSE: CCJ) McArthur River mine — home to the largest mine and highest-grade uranium resource in the world — 32 km farther along trend.
Denison has wrapped up its winter drill program at Wheeler River, and the company has to wait until after break-up to return. When it does, the company says “a large part of the [mid-year] drilling campaign will be allocated towards following up on these results.”
Wheeler River is located midway between the McArthur River mine and the Key Lake milling complex in northern Saskatchewan’s Athabasca basin. Denison owns 60% of Wheeler River and is the project operator. Cameco has a 30% stake and Japan’s JCU owns the other 10%.
Denison’s share price was unchanged on news of the second hit at Gryphon, remaining at $1.77. Denison has a 52-week share price range of $1.01 to $1.95, and 485 million shares outstanding.
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