Deep Yellow delays decision on Namibia uranium project again

Uranium developer Deep Yellow (ASX: DYL) says it will defer the final investment decision (FID) on its flagship Tumas project in Namibia until the market conditions improve. The company last year delayed the project’s FID to March 2025, citing delays in detailed engineering work.In a press release Tuesday, the Australian miner said it would now take a phased development approach to the project instead of a full-scale project development, beginning with early works infrastructure development and detailed engineering to ensure the project is “shovel ready”.However, construction of the processing plant, which involves the majority of estimated capital expenditure, will be postponed, it added.The company reiterated that the key element to delivering an FID “was always going to be the prevailing uranium market conditions” that would justify the development of what it considers to be one of the most advanced greenfield uranium projects globally.Despite the delayed FID, the company’s shares closed Tuesday’s session 4.9% higher with a market capitalization of A$826.7 million. The stock bounced off a 52-week low on Monday after recovering from last week’s global-wide market selloff.“We have a situation where the long-term uranium market is essentially broken. This is due to more than a decade of sector inactivity, persistently depressed uranium prices, and utility offtake contracting practices which are yet to support the development of greenfields uranium production,” managing director John Borshoff stated.Deep Yellow has been working on the Tumas project since 2016, and has to date delineated a resource totalling 118 million lb. of uranium oxide (U3O8) at a grade of 255 parts per million U3O8. Within the resource is an estimated ore reserve of 79 million lb. grading 298 ppm U3O8. The reserves are expected to support a long mine life of at least 22 years, with annual uranium production of 3.6 million lb.According to the company, the additional detailed engineering carried out in the past three months has confirmed Tumas as a robust, long-life project of over 20 years. Its post-tax net present value has been pegged at $577 million, with an internal rate of return of 19%. The initial capex is estimated at $474 million.“Although the Tumas project is economic at current long-term uranium prices, these prices do not reflect or support the enormous amount of production that needs to be brought online to meet expected demand,” Borshoff added.The latest optimization work by the company was based off a uranium price of $82.50/lb., while uranium futures are currently trading at around $64/lb.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com