Deep Yellow Limited says the execution phase of its Tumas Project in Namibia will only commence when uranium prices in the term and spot markets reach levels that ensure optimal shareholder returns.
Managing Director and CEO John Borshoff emphasized that the company’s decision reflects a strategic approach to market dynamics while safeguarding long-term value.
“Deep Yellow will only pursue the execution phase of Tumas once it believes the uranium price, in terms of both term and spot, is at levels that will provide the best return to shareholders in both the near and long term,” Borshoff said.
The company has set March 2025 for a Final Investment Decision (FID) but clarified that full-scale construction is contingent on uranium prices.
Deep Yellow’s Board expressed skepticism about current uranium supply forecasts, arguing that many projections overstate near- and long-term production levels.
“The Board firmly believes forecast increases in uranium supply by some analysts are materially overstated in the short, medium, and long term, and there is significant doubt regarding the pace of available greenfield uranium developments in the next 10 years,” said Borshoff.
The CEO further noted that increasing demand for nuclear power underscores the need for a recalibration of uranium prices to incentivize new production.
Despite delaying the execution phase, the Tumas Project remains on track for production in the second half of 2026, provided uranium prices align with the company’s targets.
Deep Yellow reported cash reserves of US$155 million as of December 31, 2024, with no debt.
The project is being developed in two phases. The early works phase includes the construction of non-processing infrastructure such as power lines, water pipelines, roads, site offices, and a construction camp. The execution phase involves building the processing plant, led by Ausenco Services Pty Ltd as the appointed Engineering, Procurement, and Construction Management (EPCM) contractor.
Borshoff highlighted key milestones, including an upgraded Ore Reserve Estimate (ORE) that extends the project’s life of mine from 22.5 years to at least 30 years. Additionally, water and power supply agreements with NamWater and NamPower are nearing finalization.
In December 2024, the company deferred its FID to March 2025 due to delays in finalizing detailed engineering and opportunities to optimize the project further. Upcoming activities include the completion of early works by the March 2025 quarter, including temporary access, site communications, and infrastructure for power and water supply. A groundwater supply augmentation program is set to begin in February 2025 to support dust suppression and reduce raw water demand from NamWater.
An updated financial analysis incorporating the expanded ORE, optimized flowsheet, and revised capital and operating costs will also be completed by February 2025. This analysis will inform the FID and lay the groundwork for pre-production mining, anticipated to begin in the first half of 2026.
Deep Yellow remains committed to advancing the Tumas Project while aligning its progress with market conditions. With a cautious approach to uranium price fluctuations, the company aims to balance short-term gains with long-term shareholder value.
