Deep Yellow Limited’s flagship Tumas project is expected to cost N$6 billion (US$360.5 million) according to re-costing study findings from N$7.3 billion (US$385.1 million) projected from the definitive feasibility study (DFS).
The re-costing study’s findings show that this will result in cost savings of N$458 million (US$24.6 million).
Deep Yellow’s Managing Director/CEO, John Borshoff, highlighted the significance of the adjustment, noting that “in total, 71% of project capital expenditure was re-costed. First fills, spares, EPCM, and contingency were also re-costed.”
He said the meticulous review of various project components demonstrates a commitment to optimising expenses for the Tumas Project.
The study, initiated against a backdrop of inflationary and logistical challenges, proved instrumental in affirming the commercial viability of the project, he said.
“The results provide the company with a strong platform to proceed with project financing, detailed engineering work, and maintain the timeline for FID to be made in Q3 2024,” Borshoff said.
Notable changes resulting from the re-costing study include a 6.4% reduction in the initial capital cost estimates to N$6.8 billion (US$360 million) from the January 2023 DFS of N$7.3 billion (US$384 million).
Despite the positive adjustments to the capital costs, the operating cost estimate revealed a slight increase due to factors such as a 13% increase in power charges, a 9.5% increase in diesel cost, and a 15% increase in Heavy Fuel Oil (HFO) cost.
However, Borshoff expressed confidence, stating that “re-costing work identified further potential gains to be made during the detailed engineering phase.”
The study found that base case uranium price increased conservatively to US$75/lb U3O8 from US$65/lb U3O8 to recognise continued strengthening uranium market conditions
The study not only focused on financial aspects but also identified opportunities for improvement in various project areas.
“Metallurgical test work indicated potential gains across beneficiation, washing, and PLS concentration areas that were not incorporated into the re-costing effort,” Borshoff acknowledged.
Looking ahead, Borshoff affirmed the company’s commitment to the Tumas Project, stating, “our focus now turns to project financing and detailed engineering work ahead of a potential final investment decision in the second half of 2024”.
