Deep Yellow delivers commanding lift in uranium reserves

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Aspiring uranium producer, Deep Yellow Limited has served up a milestone achievement in its ambitions to bring its Tumas uranium project in Namibia into production. Definitive feasibility study, or “DFS”, drilling has returned a cracking 121 per cent lift to the probable ore reserves previously defined in a pre-feasibility study meeting the company’s objective of delivering a mine life of more than 20 years for the multi-deposit project.

Tumas now takes in probable ore reserves of 68.4 million pounds of uranium oxide grading 345 parts per million for the combined Tumas 1, Tumas 2, Tumas 3 and Tumas 1 East deposits.

Previous estimates as part of the PFS outlined a probable ore reserve base of 31Mlb uranium oxide at 344ppm, sufficient for an 11.8-year mine life.

The stellar increase in ore reserves follows a 25,000-metre resource upgrade drilling program targeting the Tumas 3 and Tumas 1 East deposits. Subsequently, Deep Yellow reported an increase to the indicated mineral resources of 98.7Mlb uranium oxide grading 266ppm for the project.

Management says the increase in indicated resources has now allowed the company to establish ore reserves for Tumas that could support a mine life of more than 20 years, meeting its ambitions to extend the net present value of the project.

Deep Yellow believes Tumas could churn out as much as three million pounds of uranium oxide each year.

The company envisages average annual production of about 2.8Mlb of uranium oxide at a head grade of 398ppm over the 20 year mine life, up from some 2.56Mlb annually over 11.5 years as estimated in the PFS.

Production is planned to commence at Tumas 3 with Tumas 1 and Tumas 1 East incorporated after seven years. The three ore bodies are projected to continue churning out yellow cake until conclusion of mining after 20 years. Recovery from stockpiles is then anticipated to follow for more than five years.

We continue to deliver on what we set out to achieve for the Tumas DFS. We have achieved a very important milestone with the substantial Ore Reserve upgrade that has been announced confirming a long Life of Mine operation that is now possible for the Tumas Project…

A major risk milestone for Tumas has been overcome and we are very pleased with the results, which have confirmed Tumas as a long life of mine operation and demonstrated great potential to develop the Project into a tier-one uranium deposit.

Notably, the Tumas tenure holds another 15.3 million pounds of yellow cake in inferred resources which the company says may be upgraded to higher confidence resource categories in the future.

The deposits at Tumas now contain significant total mineral resources of 114 million pounds of uranium oxide at 258ppm in both the inferred and indicated categories.

Notably, some 40 per cent of the uranium-hosting palaeochannel system at Tumas is yet to be fully tested according to the company and Deep Yellow believes the exploration upside could provide further benefits to the DFS, anticipated to be completed in the second half of next year.

Deep Yellow’s ore reserve boost appears to be timed immaculately with the price of uranium recently surging from about US$30 per pound in August to more than US$40, the highest levels since 2013.

Interestingly Borshoff already rode the uranium bull some years ago as Managing Director of Palladin Resources whose market capitalisation reached the billions of dollars at the time. If the price of yellow cake continues to head north he just might make it two for two as he seeks to wade into what is looking like the second uranium boom in as many decades.

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