- Deep Yellow (DYL) completes a definitive feasibility study (DFS) for its Tumas uranium project in Namibia
- The DFS outlines annual production of 3.6 million pounds of uranium — a 20 per cent increase on the pre-feasibility study completed in 2021
- However, inflationary and COVID-related pressures since the PFS estimates have led to a 17 per cent reduction in net present value and hefty rises in capital and operating costs
- Deep Yellow will now advance financing and offtake discussions and hopes to make a final investment decision by the first half of 2024
- DYL shares are up 6.54 per cent to trade at 82 cents at 1:13 pm AEDT
Deep Yellow (DYL) has completed a definitive feasibility study (DFS) for its Tumas uranium project in Namibia.
The DFS reportedly highlights Tumas to be a potential “world-class” operation delivering “robust” returns.
When compared to a pre-feasibility study (PFS) completed in 2021, the DFS boasts a 20 per cent increase in production capacity to 3.6 million pounds of uranium oxide per annum and an 11 per cent throughput increase to 4.15 million tonnes per annum.
The company also expects to produce 1.15 million pounds of vanadium oxide per annum from the plant.
The Tumas project is forecast to produce at this rate for 10 years, based on the current reserves, with an overall mine life of 22.25 years. However, additional resources could increase this to a +30-year operation.
The DFS outlines a 17 per cent reduction in net present value to US$341 million (A$476.8 million) and a 16 per cent decline in the internal rate of return to 19.2 per cent compared to the PFS.
Further, capital and operating costs have increased, with initial capital expenditure estimated at US$372 million, representing a hefty 26 per cent increase. Cash operating costs also climbed 25 per cent to US$34.68 per pound of uranium oxide
Deep Yellow attributed the cost increases to the increased plant capacity and the inflationary and COVID-related pressures experienced in the years since the PFS was completed.
Nevertheless, DYL Managing Director John Borshoff said he believed this was a “very robust DFS”.
“Importantly, we have used appropriate assumptions and our costings are highly accurate, having been largely based on quotes received in the last quarter of 2022 and in January 2023, resulting in a very realistic outcome against the inflationary and supply headwinds that have hit the mining sector,” Mr Borshoff said.
“We intend for Tumas to be a best-in-breed uranium operation with world-leading extractive technologies and sustainability initiatives applied.”
Looking ahead, the company will now commence front-end engineering design and advance financing and offtake discussions. If all goes to plan for the company, it expects to make a final investment decision by the first half of CY2024.
DYL shares were up 6.54 per cent to trade at 82 cents at 1:13 pm AEDT.