Posted in | Uranium

Denison Mines Encounters High Grade Uranium Potential at Wheeler River Project

Denison Mines Corp. (TSX:DML)(NYSE Amex:DNN) has announced initial estimates of mineral resources prepared in accordance with National Instrument 43-101 (NI 43-101) from the work carried out to date on the Wheeler River project located in the rich Athabasca Basin of northern Saskatchewan.

These estimates are highly encouraging for the potential of Wheeler River in terms of its high grade and its size. The estimates, at a cut-off grade of 0.8% U3O8, are based on data available to date from just two zones (A and B) of the Phoenix discovery at Wheeler River.

Ron Hochstein, President and CEO, commented, "Phoenix is showing that it is in an elite class of deposits. There are only two other uranium deposits today in the world with average grades similar to Phoenix A, being McArthur River and Cigar Lake. Furthermore, we believe that these initial mineral resource estimates are just the beginning for the Phoenix trend. We've only just begun to uncover its potential. The planned winter drilling program will focus on two other zones (C and D), which could also offer significant resource potential. This project expands more and more every time we work it. I look forward to updated mineral resource estimates on the property in due course."

Wheeler River Property

The Wheeler River property, encompassing over 120 square kilometres, is favourably located along strike from the McArthur River deposit and is underlain by many of the same geological features that are present on that producing property. A prime target on Wheeler has been a quartzite ridge, where significant mineralization was intercepted in 2006 at depths of 300+ meters on two separate locations along this ridge separated by 600 meters. Work during 2008 identified the Phoenix zone, a discovery of unconformity-hosted mineralization associated with the hanging wall of the quartzite ridge. This prospective quartzite ridge structure continues over 18 kilometres on the property, and to date the joint venture has only drilled on 1.3 kilometres of the 18 kilometres. Additional geophysics work along the structure has already identified a number of targets to be drilled. The Phoenix discovery has a number of geological similarities to the McArthur River mineralization, but is at a shallower depth.

In addition, the Phoenix discovery is well located with respect to all-weather roads and the provincial power grid. Most significant, the operating Key Lake mill complex is close at approximately 35 kilometres by road south of the property.

The Phoenix Discovery mineralization occurs at the unconformity contact between rock of the Athabasca Group and underlying lower Proterozoic Wollaston Group metasedimentary rocks. Mineralization and alteration has been traced over a strike length of nearly 1.3 kilometres to date. Since the discovery hole WR-249 was drilled in 2008, 106 drill holes have reached the target depth, identifying two distinct zones (Zone A and B) of high-grade mineralization. Recently, two new zones (C and D) have been discovered which will be the target of further investigation this winter. For 2011, the joint venture has planned a major CDN$10 million, 70 hole diamond drill program, which is the largest program carried out to date on the property.

Denison is the operator and holds a 60% interest in the Wheeler River Property. Cameco Corporation holds a 30% interest and JCU (Canada) Exploration Company, Limited holds the remaining 10% interest.

Mineral Resource Estimates

SRK Consulting (Canada) Inc. (SRK) was retained by the Wheeler River joint venture to independently review, verify and present the mineral resource estimates at Zones A and B of the Phoenix discovery. The Technical Report about these mineral resource estimates will be filed on SEDAR within 45 days of this release. Messrs. Gilles Arseneau, Ph.D., P.Geo, and Cliff Revering, P. Eng., of SRK, who are both Qualified Persons as defined by NI 43-101, have reviewed the technical contents related to the mineral resource estimates contained in this release.

The mineral resource estimates utilized 75 diamond drill holes (totalling 35,656.2 metres) which were drilled from 2008 to 2010. Drill spacing across the deposits is variable, ranging from about 12.5 metres to more than 50 metres.

Three dimensional models for all zones at Phoenix were constructed using Vulcan Version 8.0.3 Mine Modeling Software. An orthogonal search ellipsoid having dimensions 40 metre x 10 metre x 2 metre was constructed and oriented to reflect the major, semi-major and minor axis of the mineralized zone; striking 52 degrees azimuth and plunging -2.5 degrees to the northeast. The long axis was oriented parallel to the long axis of the mineralization. The variables grade, density and grade times density (GXD) were interpolated into a universal block model using inverse distance squared. During the estimation process, grades above 20% were restricted to a smaller search ellipse to limit the influence of these high grade values.

The resource database utilized primarily uranium geochemical analyses from the Saskatchewan Research Council (SRC) Geoanalytical Laboratories in Saskatoon, Saskatchewan. Where geochemical analyses were not available due to incomplete sampling or core recovery issues, downhole gamma probe data were used to calculate equivalent uranium grades. A total of 51 dry bulk density samples, representing all rock types and mineralization styles form a basis for the density component of the mineral resource estimates.

The technical information contained in this press release related to the above described exploration activities is reported and verified by William C. Kerr, Denison's Vice President, Exploration, who is a qualified person as defined by NI 43-101.

Source: Denison Mines Corp.

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