Denison Mines Corp. (TSX: DML) (NYSE American: DNN) has awarded a C$16 million contract to the Canadian subsidiary of John Wood Group PLC (LON: WG) for design and engineering work at its flagship uranium deposit in Saskatchewan.
The uranium miner announced Monday that Wood Canada’s contract work was expected to begin this quarter and conclude by mid-2025. Wood helped to complete a feasibility study for Denison last year. That study indicated that in-situ recovery at the Wheeler River project’s Phoenix deposit would be worthwhile.
Wood will be responsible for designing an electrical power distribution system at the site, laboratories, communications systems and various other features of the Athabasca Basin project through the deal. Wheeler River is the largest undeveloped mining operation on the highly-developed eastern side of the region.
Once developed, the company’s flagship Phoenix deposit will constitute the first-ever in-situ recovery uranium mining operation in the jurisdiction, Denison says.
“In recognition of Wood’s performance leading the Phoenix feasibility study, competitive pricing and alignment with our bid evaluation process, we are pleased to announce the award of a detailed design engineering contract to Wood,” Kevin Himbeault, Vice President of Operations at Denison, said.
The Phoenix deposit is estimated to contain 56.7 million pounds of proven and probable U3o8 reserves. It will have a 10-year lifespan.
Check out Denison Mines, $DNN / $DML.T, not the only game in town, but an advanced development play in the Athabasca basin. I think Denison could be acquired by Rio Tinto or Cameco. I think that Cameco will be forced to make an acquisition in the coming months. https://t.co/HDdORpIMfG
— Peter Epstein, MBA (NYU Stern School of Business) (@peterepstein2) January 17, 2024
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Uranium now valued at US$105 per pound
Canada and the United States have been accelerating their rate of uranium mining and nuclear industry activity in response to strong market conditions.
Canada’s nuclear technology company Moltex Energy Canada just obtained a patent for its method of recycling spent nuclear fuel.
“Waste is one of the most important considerations in the nuclear industry, and Moltex’s process offers an elegant and cost-effective solution to safely reducing waste stockpiles,” Moltex CEO Rory O’Sullivan said.
In Canada’s richest uranium jurisdiction, the Athabasca Basin, the region’s major company NexGen Energy Ltd. (TSX: NXE) (NYSE: NXE) received environmental approval for a major uranium mine in November. That approval was a significant development in Canada’s nuclear industry as Saskatchewan’s government hadn’t provided the same authorization in over two decades.
That site is expected to be capable of supplying 23 per cent of the world’s uranium.
Canada will soon be home to one of the world’s top uranium companies. This will occur once ATHA Energy Corp. (CSE: SASK) (FRA: X5U) (OTCQB: SASKF) completes its merger with Latitude Uranium Inc. (CSE: LUR) (OTCQB: LURAF) and 92 Energy Limited (ASX: 92E) (OTCQX: NTELF).
The combined company will have 7.1 million acres of exploration territory in Canada’s top uranium mining jurisdictions.
Read more: Stallion Uranium adds over 13,000 hectares to its Athabasca Basin exploration package
Read more: China’s Betavolt creates nuclear-powered battery with 50-year lifespan
United States strives for independence
Meanwhile, the U.S. has been growing increasingly concerned over China and Russia’s strong influence in the sector. The country wants a stronger domestic uranium supply chain for its reactor fuel and is developing strategies to achieve that goal.
“Together, China and Russia account for nearly 60 per cent of the world’s nuclear enrichment capabilities,” U.S. Representative in Texas Pat Fallon said on Friday. “This is clearly a national security issue for the United States commercial nuclear reactor fleet.”
American nuclear plants currently import the majority of uranium they use, much of which comes from Kazakhstan, Russia and Uzbekistan. Russia’s state-owned company Rosatom and other Russian suppliers provide over 20 per cent of the fuel used in 93 American nuclear reactors operating at the moment.
Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR) recently made a move that will support the U.S. uranium supply chain when it started production at three mines in Arizona and Utah. The company aims to produce over 1 million pounds of American yellowcake annually from the operations starting this year.
The U.S. Department of Energy just agreed to invest half a billion dollars in domestic high-assay low-enriched uranium production for next-generation advanced nuclear reactors.
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rowan@mugglehead.com
