Deep Yellow’s expected capital investment in the Tumas uranium project in Namibia has increased to N$6.4 billion (US$372 million) from N$4.7 billion estimates in 2021, according to its latest definitive feasibility study (DFS).
The ASX-listed miner’s DFS was based on treating 4.15 million tons of ore per year to produce up to 3.6 million pounds of uranium oxide (U3O8) and 1.15 million pounds of vanadium by-product over 22 years.
The opencut operation of the project is estimated to have a life-of-mine all-in sustaining cost of $38.72/lb, an after-tax net present value of N$6.4 billion, and an internal rate of return of 19.2%.
According to Deep Yellow CEO John Borshoff, the increase in costs is reflective of increased plant capacity and inflationary forces experienced between the prefeasibility study and the DFS.
“We believe this is a very robust DFS and underscores the value of our conviction to apply effort in contrarian fashion, with a proven team, to discover the expanded Tumas project that now demonstrates its potential to be a long-life, world-class uranium operation,” said Borshoff.
“The development of Tumas is a cornerstone component of our long-held, dual-pillar growth strategy, which now also includes the Mulga Rock project in Western Australia, all to capitalise on the forecast improvement in uranium prices on the back of looming global uranium shortages from 2024. Our strategy encompasses organic growth of our own projects, and non-organic growth through consolidation in the sector.”
He said the positive outcomes of the DFS have encouraged the Deep Yellow board to start front-end engineering and design and to advance project financing and offtake discussions this year.
“We also anticipate our application for a mining licence will be granted by mid-2023 once the Environmental Impact Assessment is assessed and approved by the authorities. If the outcome of these work streams is positive, and suitable uranium market conditions prevail, we will be looking to make a final investment decision by the first half of calendar year 2024,” said Borshoff.
“We remain strong believers in nuclear energy for electricity generation with its growing role and importance both in combating climate change by reducing global gas emissions and securing electricity supply for the future.”
