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Denison Mine's (DNN) JV to Restart McClean Lake Mining Activity

Denison Mine Corp. DNN and its McClean Lake Joint Venture (“MLJV”) partner, Orano Canada Inc., announced that MLJV approved the restart of uranium mining operations using the JV's unique Surface Access Borehole Resource Extraction ("SABRE") mining process. This move will help the companies capitalize on the strengthening uranium market.

In 2024, MLJV plans to focus on preparations necessary to ready the existing SABRE mining site and equipment for continuous commercial operations. It will prepare for the installation of eight pilot holes for the initial mining cavities scheduled for excavation. The approved budget for this preparation activities in 2024 is $7 million (100% basis).

Mining is scheduled to begin at the McClean North deposit in 2025. Approximately 800,000 pounds of triuranium octoxide (100% basis) are expected to be produced from McClean North in 2025, with an additional 3,000,000 pounds of triuranium octoxide (100% basis) identified for production from McClean North and Caribou deposits between 2026 and 2030.

Orano Canada owns 77.5% of the MLJV and operates it, whereas Denison Mine owns 22.5%.

Mining at McClean lake was halted in 2008 due to falling uranium prices. During the intervening 15 years, the MLJV spent developing a patented mining process designed to selectively extract high-grade Athabasca Basin uranium ores from the surface.

SABRE is the result of a mining equipment innovation and development initiative that began in 2004. The campaign ended in 2021 with the completion of a multi-year mining test program that yielded around 1,500 tons of high-value ore.

The successful mining test of the SABRE technology in 2021 granted MLJV valuable information about the productivity and cost of SABRE operations. This information shows an incentive price that is significantly lower than current uranium prices, providing the JV with a strong basis for making the decision to restart mining at McClean lake .

Denison Mine reported adjusted earnings of 5 cents per share in the third quarter of 2023 against an adjusted loss of 1 cent reported in the prior-year quarter. The Zacks Consensus Estimate for the company’s third-quarter bottom line was pegged at a loss of 1 cent. It posted revenues of $2 million, flat year over year.

DNN belongs to the Mining - Miscellaneous industry, along with Alpha Metallurgical Resources, Inc. AMR, Wheaton Precious Metals WPM and Piedmont Lithium Inc. PLL.

Let’s discuss its peer’s third-quarter 2023 performances.

Alpha Metallurgical Resources reported adjusted earnings of $6.65 per share in the third quarter, beating the Zacks Consensus Estimate of $6.50. This compares to the year-ago quarter’s adjusted earnings of $14.21 per share. The company posted revenues of $742 million, down from the prior-year quarter’s $870 million. The top line surpassed the Zacks Consensus Estimate of $706 million.

Wheaton Precious reported adjusted earnings per share of 27 cents in third-quarter 2023, which surpassed the Zacks Consensus Estimate of earnings of 25 cents. The bottom line increased 29% year over year. Wheaton Precious generated revenues of around $223 million in the quarter, which rose 1.8% on a year-over-year basis. The top line, however, missed the Zacks Consensus Estimate of $242 million.

Piedmont Lithium came out with adjusted earnings of 88 cents per share in the third quarter of 2023, missing the Zacks Consensus Estimate of $1.51 per share. PLL reported an adjusted loss of 36 cents per share in the third quarter of 2022. The company posted revenues of $47 million, missing the Zacks Consensus Estimate of $57 million.

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