Unlocking Undervalued Upside at Denison Mines' Gryphon Uranium Deposit

The global uranium market has long been overlooked by investors, overshadowed by the rapid rise of renewables and geopolitical uncertainty. Yet within this undervalued sector lies a rare gem: Denison Mines' Gryphon uranium deposit in Canada's Athabasca Basin. Recent drilling results and economic updates reveal a high-grade asset with significant upside potential, yet its stock price () has yet to reflect this value. Investors who act now may secure a position in a low-cost, high-margin play poised to benefit from both resource expansion and synergies with Denison's flagship Phoenix ISR project.

The Gryphon Breakthrough: High-Grade Discoveries and Open Targets

Gryphon's latest drilling campaign in 2025 has delivered compelling results. A standout discovery in drill hole WR-837AD2 intersected 2.3 meters at 1.69% eU3O8, including a 0.5-meter interval grading 5.48% eU3O8—a critical indicator of high-grade mineralization. Crucially, this discovery lies 40 meters beyond the previously defined D1 lens, extending the deposit's boundaries in the down-plunge direction. The area remains open for expansion along strike to the northeast and deeper down-plunge, with neighboring drill hole WR-836 also encountering mineralization along-strike to the north.

These results underscore Gryphon's stacked lens structure, comprising 24 high-grade zones (A-series to E-series), which form a 280-meter-long, 113-meter-wide mineralized corridor. The A1 lens alone accounts for ~40% of Gryphon's indicated resources, while the newly explored D1 area contributes ~10%—a figure set to grow as drilling progresses. With the deposit's open-ended strike and plunge extensions, Gryphon's resource potential could expand beyond its current 61.9 million pounds U3O8 (Indicated) and 1.9 million pounds (Inferred) estimates.

Economics: Low Costs, High Returns, and Scalability

Gryphon's 2023 Pre-Feasibility Study (PFS) already paints a compelling picture. The underground mine scenario delivers an after-tax NPV of $864.2 million (8% discount rate) and an IRR of 37.6%, based on a uranium price of $75/lb. With estimated cash operating costs of $12.75/lb and all-in sustaining costs of $25.47/lb, Gryphon ranks among the lowest-cost uranium projects globally. These metrics are further strengthened by the recent discoveries, which could de-risk the project by validating geological models and increase resource continuity.

The deposit's proximity to Denison's Phoenix ISR project (3 km north) adds strategic value. Phoenix, nearing permitting completion, could share infrastructure and operational synergies with Gryphon, reducing capital expenditures and enhancing flexibility. For instance, Gryphon's ore could be processed at the McClean Lake mill, which already handles Phoenix's production, minimizing the need for costly new facilities.

Why the Market Underappreciates Gryphon's Potential

Despite these positives, Denison's stock trades at a ~30% discount to its 2023 NPV-based valuation, reflecting investor skepticism about uranium's long-term demand and project execution risks. However, three catalysts could re-rate the stock:
1. Upcoming Drilling Results: The 2025 program's follow-up assays and expansion targets will confirm whether the D1 lens extensions and along-strike zones add materially to resources.
2. Metallurgical Validation: The 250 kg of core samples collected in 2025 will test recovery rates, critical for proving the economic viability of underground mining.
3. Phoenix's Permitting Progress: As Denison secures approvals for Phoenix, confidence in the company's ability to execute large-scale projects will grow, benefiting Gryphon's prospects.

Investment Thesis: Act Before the Re-Rating

Gryphon's high-grade, low-cost profile and open exploration targets make it a rare asset in a sector starved for growth. With uranium prices rebounding (+25% year-to-date) and geopolitical tensions boosting demand for energy security, Gryphon's scalability could attract both commodity investors and thematic funds focused on critical minerals.

Investors should consider:
- Buying on dips: Use pullbacks below $0.80 CAD as entry points, targeting a 12–18-month price target of $1.50–$2.00 CAD.
- Monitoring catalyst timelines: Follow Denison's Q3 2025 drilling update and Phoenix's permitting milestones.
- Comparing to peers: Gryphon's economics rival top-tier projects like Energy Fuel's Lost Creek, yet its valuation lags.

Conclusion: A Rare Opportunity in a Neglected Sector

Denison Mines' Gryphon deposit is a textbook example of undervalued upside. Its high-grade discoveries, low-cost economics, and synergies with Phoenix position it to deliver outsized returns as uranium demand recovers. With drilling poised to unlock further resource growth and regulatory tailwinds strengthening, now is the time to act—before the market catches up to Gryphon's true worth.

Note: Always conduct independent research and consult with a financial advisor before making investment decisions.