Denison Mines

WHEELER RIVER - PHOENIX DRILL RESULTS, AS OF OCTOBER 4, 2012 (pdf)


THE WHEELER RIVER URANIUM PROJECT

The world-class, high-grade Phoenix discovery was made in 2008. Mineralization has been identified along a more than one-kilometre strike length and remains open. The discovery of the Phoenix deposit on the Wheeler River Property is the most significant new uranium discovery in the Athabasca Basin in many years. 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. The project is a joint venture between Denison Mines Corp. (60% interest), Cameco Corp. (30% interest) and JCU (Canada) Exploration Company, Limited (10% interest). Denison is the operator of the project.

Since the discovery hole WR-249 was drilled in 2008, 106 holes for a total of approximately 50,000 metres have been drilled. In the summer of 2009, drill hole WR-273 returned 62.6% U₃O₈ over six metres, a GT (grade X thickness) of 375.6. There are only two deposits in the world that have returned holes with a greater GT than hole 273 – one hole is on the Midwest Project and there are approximately 50 holes on the McArthur River property. The drill program has extended the strike length of the high-grade zone to over 250 metres and remains open in all directions. The mineralization has many geological similarities to the McArthur River mineralization, but is at a shallower depth.

WHEELER RIVER INITIAL RESOURCE ESTIMATES

Initial estimates of mineral resources have been prepared in accordance with National Instrument 43-101 (NI 43-101) from the work carried out on the Wheeler River uranium project located in the 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.

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. 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.

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 has been filed on SEDAR (www.sedar.com).

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 above.

WHEELER RIVER POTENTIAL

The Phoenix discovery at Wheeler represents the first stages of a world-class discovery. The chemical and structural ore-forming conditions that deposited the Phoenix mineralization continued over a very long time, measured in millions of years, and is evidence of an extremely large alteration "engine". Deposits with these incredible grades are rare in nature, and have only been documented in two other locations – at McArthur River and at Cigar Lake. Wheeler now joins this elite class of deposits and is now number 3!

The Phoenix deposits are located in the hangingwall of a rock unit termed quartzite, which is known to extend for over 18 kilometres on the Wheeler River property. To date, only 1.3 kilometres of this structure has been drill tested. All drill holes are strongly altered within this length. The deposit was discovered by drill testing a ground geophysical anomaly arising from a survey carried out in 2007, termed a DC-Resistivity survey. More recent surveys of the same type have been carried out to the southwest of this current drill area, and have disclosed similar anomalies to that tested by the discovery hole. Drill testing of these anomalies will be undertaken this winter.

2011 DRILL PROGRAM

The 2011 exploration program will be the largest drilling program yet carried out at Wheeler in more than 35 years of continuous exploration. A total of 70 holes using three diamond drill rigs will focus on discovering the “big one”. Starting on or about mid-January, one rig will start on Zone C in known mineralization and delineate this trend to the southwest into open ground. One rig will simultaneously start on Zone D, where the unconformity has not yet been tested under the strongest sandstone silicification yet observed on the property. This rig will also test for pods extending to the northeast. A third rig will start near the end of February. Based on the recommendations of the NI 43-101 Report on Resources, there may be up to 10 holes drilled in Zones A and B to increase resources in those already defined deposits. This drilling program will occur during the winter and summer drill seasons.

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