Deep Yellow Limited has announced the start of extensive resource drilling programs at its Tumas uranium project in Namibia with the expectation from this drill program being to increase the resource base and grow the Tumas 3 project Life of Mine from the current 22.5 years to greater than 30 years.
The miner said that the flagship Tumas Project continues to be the priority focus with the Definitive Feasibility Study (DFS) completed in January 2023, adding that an updated MRE for the Tumas Project can be expected in late third quarter of this year.
“The Environmental Impact Assessment (EIA) is expected to be submitted 5 April 2023 to the Environmental Commissioner for consideration and an Environmental Clearance Certificate (ECC) is expected to be issued early in the second half of 2023, opening the pathway for grant of MLA237,” John Borshoff, Managing Director of Deep Yellow Limited said.
In February and March 2023, 16 HQ diameter diamond drill holes were completed across and along the Tumas 3 deposit, to collect 800kg of solid core samples to support ongoing optimisation work and metallurgical studies.
On 28 March 2023, a resource drilling program commenced at the western end of Tumas 3. The primary aim of the drill program is to extend the Tumas 3 Mineral Resource towards the west, through Tumas 3 West and Tumas Central and to connect with the Tubas Mineral Resource.
“The program includes 340 RC drill holes totalling 9,500m and divided into 2 phases. Phase 1 includes 160 holes for 4,800m, planned to outline mineralised zones. Phase 2 is estimated to include 180 RC holes for 4,700m, focused on infill drilling within the Phase 1 newly-defined mineralised areas sufficient to enable an Inferred MRE.
Deep Yellow is progressing its development through a combination of advancing its existing assets and expanding its opportunities for diversified growth through sector consolidation. With the merger and acquisition of Vimy Resources, the expanded Deep Yellow now has two advanced uranium projects at feasibility stage located both in Namibia and Australia with the potential for production starting from the mid 2020s. In addition, with its expanded exploration portfolio, opportunity also exists for substantial increase of its uranium resource base aimed at building a significant global, geographically diversified project pipeline.
Recently, Business Express reported that a definitive feasibility study (DFS) on the Tumas uranium project had estimated that the project will require a capital investment of US$372-million.
Deep Yellow based the DFS on treating 4.15-million tonnes a year of ore to produce up to 3.6-million pounds of uranium oxide (U3O8) a year, and 1.15-million pounds of vanadium by-product over a life-of-mine (LoM) of over 22 years.
The opencut operation is estimated to have a LoM all-in sustaining cost of US$38.72/lb, an after-tax net present value of US$341-million and an internal rate of return of 19.2%.
The capital cost of US$372-million estimated in the DFS is higher than the US$295-million estimated in the 2021 prefeasibility study (PFS), while LoM operating costs also increased from US$32.89/lb to US$39.39/lb.
Deep Yellow said the cost increases were reflective of the increased plant capacity, which increased from 3.75-million tonnes a year to 4.15-million tonnes a year, as well as inflationary forces experienced between the PFS 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 at the time.
“Importantly, we have used appropriate assumptions and our costings are highly accurate, having been largely based on quotes received in the last quarter of 2022 and in January 2023, resulting in a very realistic outcome against the inflationary and supply headwinds that have hit the mining sector.
“We intend for Tumas to be a best-in-breed uranium operation with world-leading extractive technologies and sustainability initiatives applied, including a specific process route that will produce a benign tailings stream to allow for the eventual safe closure and rehabilitation.”
Borshoff said that the positive outcomes of the DFS has encouraged the Deep Yellow board to authorise the start of front-end engineering and design and to advance project financing and offtake discussions.
“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 workstreams 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.
“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,” Borshoff added.
“We remain strong believers in nuclear energy for electricity generation what with its growing role and importance both in combatting climate change by reducing global gas emissions and securing electricity supply for the future.”
For its Mulga Rock Project, the company announced that a strong opportunity has been identified for significant potential value uplift in the Mulga Rock Project by increasing the focus on the recovery of critical minerals located within the existing Mulga Rock resource shells, in addition to the uranium.
This includes metals such as copper, nickel, cobalt, zinc, and rare earths (particularly neodymium and praseodymium).
“The Company completed a 63-hole, 4,099m geo-metallurgical air core drill program on 8 December 2022. The program provided sample material for metallurgical analysis to determine ore variability and estimating process recoveries for critical minerals. Results are expected to be received shortly and will be incorporated into the revised DFS, which is on track to start mid-2023. Ongoing results of the test work will be reported once available.
“On 29 March 2023, an 810-hole, 50,000m air-core drilling program commenced in support of the revised DFS. This program will better define reserve/resource variability factors, upgrade the resource base for uranium and the targeted non-uranium minerals, in addition to providing further material for metallurgical analysis. This program is currently estimated to conclude in mid-Q3 2023, with an updated MRE expected for late in that quarter,” the company explained adding that this drilling program is restricted to the Mulga Rock East deposits (Ambassador and Princess).
“These deposits are richer in grade both for critical minerals and uranium and represent majority of the known mineral resources in the Project. As a consequence, it is expected this eastern area will be mined first to provide up to 20 years of operating life, before the lower-grade deposits that occur to the west (Emperor and Shogun deposits) are mined.”
Reporting on the Alligator River Project, the miners said results for the 1,116 chemical assays associated with the extensional drilling program on the Angularli deposit, completed in late 2022 (see announcements to the ASX dated 22 October 2022 and 27 January 2023), are imminent.
These results, combined with historical assays, will provide the basis of an updated MRE, to be announced in mid-Q2 2023.
“A review of all regional and local Project data has commenced to combine all Company knowledge with all available data sets to develop a comprehensive exploration model. This desk top study will delineate the priority prospective corridors to concentrate the effort in finding further discoveries in this important uranium province. Further, this work will result in a multiple approach being formed with short, medium and long-term exploration objectives defined for the investigation of the Alligator River Project,” concluded the miner.