Deep Yellow Confirms Improved Project Economics with Tumas Definitive Feasibility Study
Uranium explorer Deep Yellow (ASX:DYL) has confirmed that the Definitive Feasibility Study (DFS) for its flagship Tumas project in Namibia is on track and improving pre-feasibility assumptions.
The main lines of work completed to date have outperformed some of the main contributions to the positive pre-feasibility study completed in January last year.
The project’s expected production life has increased from 11.5 years to 25.75 years, while operating margins have increased by 114% to $3.1 billion.
The after-tax net present value also improved from $290 million to $578 million, while the internal rate of return sits at 23%.
All-in sustaining costs for the first 20 years of production decreased from $43.12 per pound of uranium oxide to $42.67/lb.
Ore reserves increase
Ore reserves at Tumas increased by 120% to 68.4 million pounds of uranium oxide at an average grade of 345 parts per million and a cut-off grade of 150 ppm.
The company said there remains potential to further expand reserves in the project area using 48.6 million pounds of inferred resources available for upgrading.
There is potential for further exploration with approximately 40% of the highly prospective Tumas paleochannel system still underexplored.
Upgrading the ore reserve fulfills a critical DFS objective, after pre-feasibility work indicated a potential doubling of the net present value by increasing the Tumas mine life beyond 20 years at pre-feasibility production rate.
A detailed trade-off study concluded that the most cost-effective power supply option for the Tumas project would be via the NamPower local grid, supplemented by a solar panel with process heat provided by conventional heavy fuel oil boilers.
This arrangement is expected to result in lower overall costs than assumed for the pre-feasibility study and could also improve sustainability and life-of-mine greenhouse gas emissions.
The water supply proposed for the Project remains a combination of existing groundwater and local utility NamWater supplies.
An independent review of transport and logistics infrastructure concluded that current road, air and sea services are sufficient for Tumas and would not impact existing local demand.
Deep Yellow has confirmed that the process for extracting uranium and vanadium from Tumas ore remains fit for purpose, as outlined in the pre-feasibility study, and that no significant changes would be required to achieve recovery. optimal, cost and long-term exposure to site rehabilitation.
A study conducted by the Commonwealth Scientific and Industrial Research Organization (CSIRO) on the impact of seepage from waste rock dumps and tailings storage facilities concluded that the downstream interaction between ionic elements (mainly uranium, vanadium, and lead) and groundwater would cause these metals to precipitate in the immediate vicinity of the interaction zone in much the same way as occurs now.
The discovery was considered “highly significant” as it validates the tailings management process developed for Tumas with the aim of minimizing environmental impacts.
Deep Yellow said the work completed to date paves the way for the start of the second and final DFS phase.
This will include detailed process design, operating and capital cost estimates, detailed mine planning, optimization of ore reserves and negotiation of major contracts in preparation for project implementation.
Ausenco Services and Cube Consulting are key contributors to the DFS, building on the work done during the pre-feasibility phase.
Deep Yellow will engage with debt financing providers and potential customers alongside the second phase.