Deep Yellow has once again deferred the Tumas project’s final investment decision, and the construction of the processing plant has been delayed until an improved uranium price incentive supports greenfield project development.
This is Deep Yellow’s second time deferring the Tumas final investment decision.
In December 2024, Deep Yellow deferred the Tumas Project’s final investment decision to early March 2025 after stating in September 2024 that it would announce the final investment decision in Q4 2024.
According to Deep Yellow, the 2024 deferment was due to delays in receiving final costing and quotes for detailed engineering work and the opportunity to undertake further optimisation and enhancements.
The Tumas project has 125 km of highly prospective palaeochannels with uranium deposits totalling 132.9 Mlb U308.
Although the latest Deep Yellow update says the additional detailed engineering carried out in the past three months has confirmed Tumas as a robust, long-life project, the key element to delivering the final investment decision would always be the prevailing uranium market conditions that would justify developing a greenfield uranium project.
“Therefore, the final investment decision has been deferred to fully capitalise on the project’s upside potential, thereby protecting shareholder value,” Deep Yellow says in an update.
The update further says the Deep Yellow Board has decided to provide staged approval for the project and is delaying the construction of the processing plant, which will involve most estimated capital expenditure.
Regardless, Deep Yellow says it will move ahead with early works on 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 due to increasing demand and the precarious nature of the supply outlook.
Deep Yellow managing director John Borshoff says the long-term uranium market is broken due to more than a decade of sector inactivity, persistently depressed uranium prices, and utility offtake contracting practices, which are yet to support the development of greenfield uranium production.
Borshoff says although the Tumas Project is economic at current long-term uranium prices, these prices do not reflect or support the enormous amount of production needed online to meet expected demand.
He further says they expect from experience that supply shortages will only be exacerbated by likely delays and underperformance of the sector generally.
“Deep Yellow is in an enviable position, having one of the world’s most rigorously evaluated greenfield projects, and it is ready to hit the “go” button.
“The extended detailed engineering and associated studies that have been completed provide even greater confidence in what can be delivered and how.
“Water and power supply agreements have been completed as we push ahead with the off-site infrastructure needs, and project financing is proceeding well.
“Combine this with the strong stewardship offered by our fully proven technical teams and leadership, which are unique to the sector of emerging producers, and it is clear we have all the ingredients and capability to move ahead positively when justified,” Borshoff says.
According to Borshoff, the Tumas Project is ready to take the next step, but a healthy prevailing uranium market is a key prerequisite.
He emphasises that the final project approval will be delayed until uranium prices fully reflect a sustainable incentivisation environment essential to encourage the development of new projects for much-needed additional production.
“This deliberate strategic decision reflects the company’s experience-based approach to sustainable uranium production aimed entirely at preserving its precious resources and reserves to achieve better value for Deep Yellow and its shareholders and facilitate continued growth,” Borshoff says.
He further says the uranium demand outlook is undeniable, driven by decarbonisation efforts, forecasts of continued enormous energy demand growth, the prevailing structural supply shortages, and now having to deal with the added, newly emerging requirements from the developers of energy-hungry datacentres, give clear upside for the supply sector.
“The reality is there are limited greenfield uranium deposits available for start-up globally over the next 10 years to satisfy projected demand, and new uranium supply will be virtually impossible to achieve in the current price environment.
“Nuclear utilities cannot ignore that unless uranium prices increase to appropriate levels and large amounts of capital become available to the supply sector, those greenfield projects will remain undeveloped.
“It is against this backdrop that we are comfortable with our decision to carefully progress areas of the project such as early works infrastructure and detailed engineering but not commit the capital to construct the process plant at this time,” Borshoff says.
