Name of the Project
Tumas uranium project.

Location
The Tumas palaeochannel system is located within Deep Yellow’s 100%-owned Reptile project, in Namibia.

Project Owner/s
Uranium miner Deep Yellow.

Project Description
The objective of the project is to develop a facility to treat ore from the Tumas 1, Tumas 2, Tumas 3, Tumas 1 East and Tubas ore resources.

Envisaged is an operation treating 4.15-million tonnes a year to produce up to 3.6-million pounds of uranium and 1.15-million pounds of vanadium by-product a year over a projected mine life of 22.25 years, based on existing ore reserves.

Additional resources will likely increase the life-of-mine (LoM) to more than 30 years.

The mine will be a conventional, shallow opencut, truck-and-shovel operation using contract mining.

The process route comprises a beneficiation process to reject barren material, leaching, solid liquid separation, pregnant leach solution concentration, vanadium recovery, uranium recovery and uranium barren liquor treatment.

The project also includes the construction of a 13.5 km site access road, a 45.1 km, 132 kV powerline and a 65 km water supply pipeline.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
A definitive feasibility study (DFS) review completed in December 2023 found that the base case uranium price had increased from $65/lb to $75/lb, owing to market-strengthening conditions, which resulted in a post-tax net present value (NPV) increase of 68% to $570-million, or A$838-million, with an internal rate of return (IRR) of 27%.

In a more optimal scenario of the uranium price reaching $90/lb, the project’s NPV increases to $878-million and its IRR to 36.1%.

Capital Expenditure
The DFS review has validated a lower initial capital cost for Tumas of $360-million, or A$529-million, down 64% from the initial estimates in the DFS.

Recosting work has identified further potential gains to be made during the detailed engineering phase of the project, with more gains to be made across beneficiation, washing and concentration as demonstrated by metallurgical testwork not having been incorporated into the recosting effort.

Planned Start/End Date
Production startup is expected in 2026.

Latest Developments
Deep Yellow has deferred the final investment decision (FID) to fully capitalise on its upside potential and protect shareholder value, as the uranium market does not currently support this.

The company deferred the FID to March, following delays in receiving final costing and quotes for detailed engineering work.

Additional detailed engineering conducted in the past three months confirmed Tumas as a robust, long-life project. 

The board has elected to provide staged approval for the project and is delaying the construction of the processing plant, which involves the majority of estimated capital expenditure.

Deep Yellow will continue to move ahead with early works infrastructure development and detailed engineering; however, full-scale project development will be delayed, allowing for what the board believes will be the inevitable improvements in global uranium prices, owing to increasing demand and the precarious nature of the supply outlook.

Although the Tumas project is economic at current long-term uranium prices, these prices do not reflect or support the considerable amount of production that needs to be brought online to meet expected demand.

Moreover, the company expects supply shortages will only be exacerbated by likely delays and underperformance of the uranium sector generally.

“Deep Yellow is in an enviable position . . . having one of the most rigorously evaluated greenfield projects in the world ready to hit the ‘go’ button. The extended detailed engineering and associated studies that have been completed provide even greater confidence of what can be delivered and how,” Deep Yellow MD John Borshoff has said.

He has indicated that project financing is proceeding well, with water and power supply agreements have been completed as the company proceeds with the off-site infrastructure needs.

“Combine this with the strong stewardship offered by our fully proven technical teams and leadership, unique to the sector of emerging producers, and it is clear we have all the ingredients and capability to move ahead positively when justified.

“We believe our shareholders are patient and would prefer that we maximise value rather than rush to market. We will continue to derisk the project through a staged development approach,” Borshoff has stated.

Key Contracts, Suppliers and Consultants
Ausenco Services (DFS and engineering, procurement and construction management).

Contact Details for Project Information
Deep Yellow, tel +61 8 9286 6999 or email info@deepyellow.com.au.